Crude Oil ETFs Continue to Rally Despite Surprise Inventory Build February 24, 2021
Crude oil and crude ETFs are gaining again Wednesday after sliding on Tuesday following a surprise U.S. inventory build reported by the API. Oil is also bolstered by a struggling restart to U.S. oil production lost during the Texas Freeze and a weaker U.S. dollar.
U.S. benchmark West Texas Intermediate crude oil gained 2.25% or $1.39 to trade at 63.05, having traded as high as $63.37.
Crude ETFs gained amid the news as well, with the
Earlier on Wednesday, oil prices were struggling after their losses Tuesday, but gained traction in the morning after the U.S. dollar weakened.
Crude ETFs Climbing Again Amid Talk of a Commodities Supercycle
Crude oil and crude ETFs are making considerable gains Monday on renewed supply concerns and recovering demand.
While international benchmark Brent crude gained $1.78, or 2.85% to trade $64.70 per barrel, West Texas Intermediate (WTI) crude oil climbed $1.89, or 3.2%, to trade at $61.13 per barrel.
Abnormally frigid conditions in Texas and the Plains states forced the closure of as much as 4 million barrels per day (bpd) of crude production, as well as 21 billion cubic feet of natural gas output, analysts estimated. The natural gas shutdown has caused widespread problems throughout Texas, New Mexico, and Arizona, where a plethora of customers were either freezing or paying exorbitant energy bills.
Brent Crude Oil s Bullish Developments, Approaching Important Level etfdailynews.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from etfdailynews.com Daily Mail and Mail on Sunday newspapers.
Spiking Treasury yields are irking investors as they fear the rise could affect high-growth companies that count on the bonds for easy borrowing. These yields also limit the desire for risk appetite and stocks.
Key stocks and ETFs like the
Vanguard Information Technology ETF (VGT) are falling, as Apple, Amazon, Microsoft, Netflix, and Alphabet all traded at least 1% lower. Meanwhile, energy ETFs like the
Treasury Yields Moving Upwards
The 10-year Treasury yield surged 14 basis points last week to 1.34%, near its highest level since February 2020. The benchmark yield reached a high of 1.37% before flattening out, making for a collective pop of 25 basis points in February.
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United States Oil Fund LP USO and
United States Brent Oil Fund LP BNO adding about 2.6% and 3.2%, respectively, past week. The real surge was noticed on Feb 12, when USO and BNO were up 2.5% and 2.8%, respectively. Freezing weather has instigated the oil rally.
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“Winter storm and arctic blast of cold weather that is making its way south to Houston may have some severe impacts on the oil industry.”“Frigid weather means that many oil wells may be shut in. Water is produced along with oil, that water can freeze up equipment,” oil analyst Andy Lipow wrote over the weekend, as quoted on CNBC.