COM - TD Securities thinks oil can rebound higher over the next 6-months

2023-07-05 07:29:28 ET

Even though crude oil ( CL1:COM ) has felt downward pressure of late, TD securities believes that oil can still rally over the next 6 months.

At the start of second half of the trading year oil trades near the $71 per barrel level and has steadily traded below its 100-day moving average since April 28. Furthermore, oil now trade lower in 2023 by 11.7% and is off by 14.8% from its peak year-to-date price of $83.53 per barrel which was recorded back on April 12.

Regardless of the current restraints oil has felt, Bart Melek, Global Head of Commodity Strategy at TD Securities stated in a recent investor note: “We do expect crude to rebound in the second half of the year.”

“We think approaching $90 probably not unreasonable in the next six months or so as the worst of the fears about a recession moderate,” Melek added.

“When we look at demand growth for 2023, we're still looking north of two million barrels per day, and we continue to expect OPEC plus to be fairly well-disciplined on the supply side.”

For investors that are following crude oil prices they may also look to analyze futures-based exchange traded funds that track and mirror the price action of oil. Some names include the following:

• United States Oil Fund, LP ETF ( NYSEARCA: USO )
• United States Brent Oil Fund, LP ETF ( NYSEARCA: BNO )
• ProShares Ultra Bloomberg Crude Oil ETF ( UCO )
• ProShares UltraShort Bloomberg Crude Oil ETF ( SCO )

Moreover, broad spectrum energy funds may be another option. Some ETFs that fall into this category are as follows:

• Energy Select Sector SPDR Fund ( NYSEARCA: XLE )
• Vanguard Energy ETF ( VDE )
• SPDR S&P Oil & Gas Exploration & Production ETF ( XOP )
• VanEck Oil Services ETF ( OIH )

More on Energy:

• Saudi Arabia to extend oil production cuts by an extra month, lifting prices
• Brent crude posts first monthly gain this year but fourth straight quarterly loss
• Oil Continues To Be Stuck In No-Man's Land And What Needs To Happen To Change That

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