The ProShares UltraShort Bloomberg Crude Oil ETF (SCO) is experiencing upward movement due to a combination of factors affecting the crude oil market. On December 6, 2024, oil prices faced downward pressure as concerns about a supply surplus persisted despite OPEC+'s decision to extend production cuts. Analysts have noted that the market remains bearish, with Brent crude futures set to drop 2% for the week and U.S. West Texas Intermediate (WTI) futures poised for a 0.5% decline. The bearish sentiment is driven by sluggish global demand, particularly from China, and rising supply from non-OPEC+ producers, which have kept prices under pressure.
Geopolitical tensions in the Middle East, including ongoing clashes between Israel and Hezbollah, have added to market uncertainty, although they have not yet resulted in significant supply disruptions. Additionally, technical indicators show that crude oil futures are retreating from critical resistance levels, signaling potential for further downside. The market outlook remains bearish, with analysts suggesting possible targets near $66.53 and $65.65 if the downward momentum continues. This environment has contributed to the upward movement of the SCO ETF, which benefits from declines in crude oil prices.
The SCO ETF is up 2.04% in pre-market hours on Friday, December 6, reaching $18.75 as of 9:21 AM ET.