Crude oil price investing flows show asset managers increasing

Crude oil price investing flows show asset managers increasing exposure to commodities ETFs, with oil allocations up 5% month-on-month. Brent’s positive carry structure is enticing for long-term holders, and companies with efficient upstream operations are expected to see capital inflows in the coming earnings season. At the same time, the OPEC cartel has approved multiple production rate increases as Saudi Arabia looks to take market share away from the US. Most recently, the cartel announced in September that its member countries will be boosting production by 137,000 barrels per day in October. Although they also trade above the industry’s 0.6X price to forward sales multiple, CVX and XOM are still under the preferred level of less than 2X, and the S&P 500’s 5.6X. Crude oil price investing momentum is supported by Chinese manufacturing data, which exceeded market expectations. Brent rallied to $88 during intraday trade, helping energy equities outperform the broader S&P 500 by 0.7%. Portfolio managers are adjusting sector weightings to benefit from the commodity’s inflation-hedging properties.