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Invesco DB Oil Fund (DBO) Hits a 52-Week High

The Invesco DB Oil Fund (DBO) hits a new 52-week high. Are more gains in store?

This story originally appeared on Zacks

Invesco DB Oil Fund DBO is probably a suitable pick for investors looking to gain momentum. The fund just hit a 52-week high and is up 135.5% from its 52-week low price of $6.29/share.

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Let’s take a look at the fund and its near-term outlook to get an insight into where it might be headed:

DBO in Focus

The fund tracks changes, whether positive or negative, at the level of the DBIQ Optimum Yield Crude Oil Index Excess Return plus the interest income from the holdings of primarily U.S. Treasury securities and money-market income less expenses. It has AUM of $468.4 million and charges 77 basis points in annual fees.

Why the Move?

Oil prices crossed the $80-a-barrel mark amid the ongoing global power crisis. The price of crude reached a seven-year high level. Shrinking crude inventories, supply disruption in the Gulf of Mexico following a couple of hurricanes and surging fuel demand are pushing oil prices higher.

Soaring coal and natural gas prices in Europe and Asia due to a supply-demand imbalance before the severe winter season is driving consumption of diesel and kerosene (according to a Bloomberg article). TheOrganization of the Petroleum Exporting Countries (OPEC) and a Russia-led group of oil producers, collectively called OPEC+ decided to raise production by 400,000 barrels a day each month. Also, the coronavirus vaccine rollout is gradually controlling the spread of the outbreak across the globe and augmenting demand for the fuel. This makes funds like DBO an attractive investment option.

More Gains Ahead?

It seems like the fund will remain strong with a positive weighted alpha of 97.66, which gives cues of a further rally.

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Invesco DB Oil ETF (DBO): ETF Research Reports


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