The ProShares UltraShort Bloomberg Crude Oil ETF (SCO) is experiencing upward movement due to several factors impacting the crude oil market. A significant development is the recent increase in U.S. oil production, which reached a record high of 13.513 million barrels per day, as reported by the Energy Information Administration. This surge in production comes despite OPEC+ extending production cuts, highlighting the robust output from non-OPEC+ producers, particularly in the U.S. The increase in the U.S. oil rig count by five this week further underscores the rising production levels, contributing to a bearish sentiment in the oil market.
Additionally, the OPEC+ group's decision to delay further production adjustments has added to the market's perception of potential oversupply. Concerns about a crude surplus next year, driven by strong production from non-OPEC+ countries, have led to a cautious approach by OPEC+ to avoid unwanted barrels flooding the market. This cautious stance, coupled with the current high production levels, has exerted downward pressure on crude oil prices, benefiting inverse ETFs like SCO.
The ProShares UltraShort Bloomberg Crude Oil ETF (SCO) rose to $18.73, marking a 1.90% increase as of 1:32 PM ET on December 6th.