Oil prices are pushing aggressively higher.
In fact, last checked, crude was up another $1.55 to $87 a barrel.
For one, there’s fear of an imminent Russian invasion of Ukraine, which Secretary of State Anthony Blinken is trying to diffuse.
However, according to NBC News, Blinken “reiterated Washington’s commitment to the country’s territorial integrity and repeated warnings that renewed Russian aggression would be met with ‘very severe consequences,” which could make the situation far more tense.
Two, a deadly drone attack in the UAE capital could mark a dangerous turning point in the Middle East, and could also drive oil prices higher.
“In addition to being the first deadly attack in the UAE in many years, the drone attacks on Monday demonstrated the Houthis’ ability to launch long-range attacks,” added CNN. “Yemen’s rebels frequently conduct cross-border attacks on Saudi Arabia, Yemen’s neighbor, but these were relatively short distances in comparison with Abu Dhabi, and the vast majority of the missiles and drones were intercepted before they hit their targets.”
Three, oil supply is tight.
Not only did Turkey just say it would cut oil flows on the Kirkuk-Ceyhan pipeline, analysts are forecasting tight oil supply in 2022, with some calling for the return of $100 oil.
The good news is we can profit from higher oil with ETFs for example, including:
SPDR Energy Select Sector ETF (XLE)
When we first highlighted the XLE, it traded at $52.70. It’s now up to $64.43, and could be headed to $70, near-term. The XLE ETF provides exposure to companies in the oil, gas and consumable fuel, energy equipment and services industries, as noted by State Street SPDR. Not only does an ETF allow for diversification, you can buy it for less.
Invesco DB Oil Fund (DBO)
DBO traded at $13.85 when we first mentioned it. It’s now at $14.92, and could push higher with oil prices. This ETF seeks to track changes, whether positive or negative, in the level of the DBIQ Optimum Yield Crude Oil Index Excess Return plus the interest income from the Fund’s holdings of primarily US Treasury securities and money market income less the Fund’s expenses. It trades WTI crude futures.
iShares Global Energy ETF (IXC)
IXC was at $27. It’s now at $31.81, and could push higher. The iShares Global Energy ETF seeks to track the investment results of an index composed of global equities in the energy sector. Trading at $27, some of its top holdings include Exxon Mobil, Chevron Corporation, BP PLC, Total SA, and EOG Resources.
