Oil prices are climbing as sanctions on Russia disrupt supply, boosting interest in oil ETFs for investors.
If you’re looking to ride this oil wave, there are some ETFs that track oil futures directly. The United States Oil Fund (USO), United States Brent Oil Fund (BNO), Invesco DB Oil Fund (DBO), Invesco DB Energy Fund (DBE), and United States 12 Month Oil Fund (USL) are all popular options that could be worth checking out.
The U.S. has just imposed its toughest sanctions yet on Russia’s oil industry, targeting major exporters like Gazprom Neft and Surgutneftegas. This move aims to cut off funds for Russia’s war in Ukraine and is likely to disrupt oil supplies to big buyers like China and India. As a result, these countries may need to look for oil from the Middle East, Africa, and the Americas, which could push prices even higher.
On top of that, colder weather and dwindling U.S. stockpiles are adding fuel to the fire. Many areas are facing extreme weather, raising concerns about oil production and refinery operations. The latest report shows that U.S. crude supplies dropped by 1 million barrels, marking the seventh week in a row of declines. Notably, stocks at the Cushing hub in Oklahoma have hit a 10-year low.
The surge in oil prices is also backed by President Biden’s announcement to ban new offshore drilling along most U.S. coastlines. This bullish sentiment has widened the Brent and WTI monthly spreads, indicating a tightening market with strong demand. It looks like this trend might stick around for a while, acting as a major driver for oil prices.
