Voya Financial (VOYA) Q3 Earnings and Revenues Top Estimates

Oil prices increased considerably (i.e. by about 8%) on Apr 3 as OPEC+ producers agreed a surprise oil output cut on Sunday. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, decided to cut production targets by about 1.16 million barrels per day from May. The cut will run until the end of 2023.

The output cut is in addition to the 2 million barrels per day cut announced last October by the oil cartel. Per Reuters, the latest announcement brings the total output reduction to 3.66 million barrels per day (bpd), which roughly equals to 3.7% of the global demand.

The move also came on the back of Russia’s decision to trim oil production by 500,000 barrels per day until the end of 2023, according to the country’s Deputy Prime Minister Alexander Novak. The head of investment firm Pickering Energy Partners expect this oil production cut to boost prices by $10 per barrel, as quoted on Reuters.

Apart from the OPEC+ production cut, the recovery of global oil demand from China reopening is also helping the oil demand and prices. Per CNBC, about 38.5% of global oil demand recovery is likely to come from China.

Oil to Hit $100 Per Barrel Soon?

“OPEC+‘s plan for a further production cut may push oil prices toward the $100 mark again, considering China’s reopening and Russia’s output cuts as a retaliation move against western sanctions,” CMC Markets’ analyst Tina Teng told CNBC. In March, oil prices nosedived to their lowest since December 2021, as the banking rout was thought to be weighing on global economic growth and oil demand.

However, with the backing crisis having been managed efficiently and timely and the OPEC+ continuing output cuts, we can expect a meaningful rally in oil prices in the near term.

Against this backdrop, below-mentioned country ETFs may gain/lose.

ETFs to Gain

Global X MSCI Norway ETF (NORW)

Norway is among the top 10 nations famous for oil exports and with its comparatively low population, oil forms the key part of the country’s GDP. Per U.S. Energy Information Administration (EIA), Norway is the largest oil producer and exporter in Western Europe. The oil and gas sector makes up around 22% of Norwegian GDP and 67% of Norwegian exports.

iShares MSCI Canada ETF (EWC)

Canada is also among the world’s top 10 oil producers. The oil, gas and mining sector makes up about over a quarter of Canada’s economy. The country is one of the world’s largest producers of dry natural gas.

ETFs to Lose

iShares India 50 ETF (INDY)

India is almost entirely dependent on imports to back its oil needs. An oil price rally could thus be a major deterrent to India investing.

iShares MSCI Turkey ETF (TUR)

Normally, Turkey’s 90% of the crude requirements are satisfied by imports. Hence, this country’s economy is also under tight spot. In any case, the country’s economy has been suffering from higher inflation and natural calamities.

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iShares India 50 ETF (INDY): ETF Research Reports

iShares MSCI Turkey ETF (TUR): ETF Research Reports

iShares MSCI Canada ETF (EWC): ETF Research Reports

Global X MSCI Norway ETF (NORW): ETF Research Reports

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Zacks Investment Research

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