5 ETFs And Stocks Riding High On Oil Rebound

Oil has been the hottest commodity this year and is on a roller-coaster ride. This is especially true as prices strongly rebounded from a bear territory hit in early June, with U.S. crude comfortably trading above $60. Notably, oil price advanced in 12 of the past 15 sessions and is hovering near the highest level in more than a month.

The latest rally came on the back of shrinking crude inventories and concerns that Tropical Storm Barry could derail crude production in the Gulf of Mexico. In particular, U.S. crude inventories dropped 9.5 million barrels in the week to Jul 5, more than triple the analyst expectation of a 3.1 million-barrel draw.

Ahead of the first major storm of the Atlantic hurricane season, U.S. oil producers have started to cut production in the Gulf of Mexico, which accounts for 17% of U.S. crude oil output or 12 million barrels per day. Chevron Corp (CVX - Free Report), Royal Dutch Shell (RDS-A - Free Report), BP plc (BP - Free Report), Anadarko Petroleum APC and BHP Group (BHP - Free Report) are in the process of removing staff from 15 offshore platforms. Phillips 66 (PSX - Free Report) is expected to close its 253,600-barrel-per-day Alliance, Louisiana, refinery because of the storm threat.

Oil price also got a boost from the latest Iranian attempt to impede a British tanker that may disrupt supply in the Middle East. Moreover, OPEC oil production dropped to the lowest level since April 2014 in June. OPEC and some non-OPEC producers including Russia have extended their oil supply cut pact until March 2020 to tackle global supply glut and rebalance the oil market. Russia also joined Saudi Arabia to extend existing output cuts of 1.2 million barrels per day, or 1.2% of global demand, until December 2019 or March 2020. All these factors bode well for the oil outlook.

Given this, investors might want to tap the space with the top-performing energy ETFs and stocks over the past month. For them, we have highlighted five funds and stocks that are poised to perform well, should oil prices rise.

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