Oil prices are up 4% on concerns that Hurricane Milton in the U.S. and an intensifying military conflict in the Middle East will put global energy supplies at risk. Brent crude oil, the international benchmark, rose 3.7% on October 10 to settle at $79.40 a barrel. West Texas Intermediate (WTI) crude oil, the U.S. standard, increased 3.6% to settle at $75.85 per barrel.
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The sharp rise in prices comes as the U.S., the world’s largest oil producer, hunkers down for the impact of Hurricane Milton near the Gulf of Mexico, the heart of the country’s energy sector. The spike in crude prices also comes as the conflict between Israel and its neighbors intensifies, raising the prospect of all out war in the Middle East.
Rising Oil Demand
Also pushing crude oil prices higher are reports suggesting that energy demand in China and the U.S., the world’s two biggest oil consumers, could rise in coming years. Some energy analysts are saying that further economic stimulus from the Chinese government in Beijing could help boost oil demand in the nation of 1.4 billion people.
At the same time, lower interest rates could spur demand for crude oil in the U.S., say analysts. Lower interest rates decrease borrowing costs for consumers and businesses, which can increase economic activity and demand for oil and other energy sources such as natural gas.
Is the ProShares Ultra Bloomberg Crude Oil ETF a Buy?
The ProShares Ultra Bloomberg Crude Oil ETF (UCO), which tracks the Bloomberg WTI Crude Oil Index, has risen 10.57% this year as indicated by the chart below. While crude oil prices are marching higher now, they declined steadily throughout the summer months and were below $70 a barrel at several points.
