Why Oil and Its ETFs Could Continue to Rise

The price of crude oil and its ETFs have been creeping up and there are signs that indicate the commodity could very well continue to rise.

Most recently, crude has soared north of $80/barrel and Lee Loweel of Investment U states that the price could continue to rise as hedge funds that have been sitting on the sidelines for months begin to find a home in the oil markets.

Additionally, there are plenty of signs indicating that the U.S. economy is finally getting out a recession, emerging and frontier markets are expanding, growing and developing exponentially and the U.S. dollar continues to remain volatile.

With this in mind, in addition to some concerns of supply and demand, crude has a few factors supporting a sustainable price. There are several ways to gain exposure to the oil market with ETFs, including through the use of funds that trade futures or hold stocks of oil companies.

• United States Oil Fund (NYSEArca: USO): up 23.3% year-to-date

• SPDR S&P Oil & Gas Exploration & Production (NYSEArca: XOP): up 35.9% year-to-date

Kevin Grewal contributed to this article.

Comments

[Davewmart:]

The IEA has consistently lied about oil supplies:
guardian.co.uk/env...

All the pressures on the IEA have been to exaggerate reserves, from the US and also from the oil producers, as they get a bigger say in OPEC according to reserve estimates.
So according to their own unaudited figures Saudi has acheived the remarkable fear of exporting many billions of gallons of oil, whilst it's reserves remain constant!
In addition to the politics of OPEC, they also do not want to forecast shortages as serious efforts might then be made to reduce oil dependence.
Governments like the UK have hidden behind IEA forecasts, as they did not want to take the painful measures that would be required by oil shortages.
The situation is actually far worse than simply going into a gradual decline, as you have a whipsaw effect, with high oil prices killing the economy, and the reduced demand for oil then killing oil prices so it is uneconomic to develop expensive new oil fields.
In addition the demand for oil from the producers is rapidly rising, leaving ever less for export.
This is crash territory, not decline.
The IEA has lied to us, and lied again and again

Nov 10 07:55 AM

[LaChic:]

I expect oil to rise to the 90's PB near term before taking a dip, so USO is a buy still. Why? I tell you why? Obama and his adm are the culprid here, according to their numbers, the economy is improving, we are out of the recession, yada, yada, so, if according to this adm we are improving then Oil demand should improve as well. But here is the kicker, the Obama adm is wrong, dead wrong......I follow trends, so until the trend tells me otherwise I'm sticking with oil for the time being.

Nov 10 02:05 PM

[LaChic:]

The Saudis are done, worry about the Russians, they are the ones who control the oil, it is the main reason Obama is kissing their butt...

Nov 10 02:09 PM