After falling to $63.64 per barrel in May 2023, the continuous NYMEX WTI crude oil futures contract rallied to $95.03 in September, where they ran out of upside steam. In an October 4 Barchart article, I wrote, “The odds favor a continuation of the rally in oil, putting more upward pressure on inflation.” The nearby December NYMEX contract settled at the $82.55 per barrel level on October 4. While it rallied to just below $90 on October 20, the price turned lower and was around $82 per barrel on November 6.
The prospects for higher oil prices remain a clear and present danger over the coming months. The Bloomberg Ultra Crude Oil 2X ETF product (UCO) turbocharges crude oil’s performance on the upside, but the leverage erodes its value when the energy commodity moves lower or remains stable.
