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Sam Altman Warns AI Development Needs An Energy &#39;Breakthrough&#39; As Financial Pundit Says &#39;AI Data Centers Won&#39;t Run On Hopes And Dreams&#39;

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Rising Fuel Costs Lead To Win For Energy, Cathie Wood’s Biotech Play Loses Big - ETF Winners And Losers: Medium-Cap Returns

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We performed a screening of medium-cap ETFs, defined as having Assets Under Management (AUM) between $2 billion and $10 billion - to determine what funds had the largest positive and negative returns on the week, according to data from etfdb.com. Only non-leveraged funds were considered.

Rising Fuel Costs Lead To Win For Energy, Cathie Wood&#39;s Biotech Play Loses Big - ETF Winners And Losers: Medium-Cap Returns

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Users of ChatGPT and other competing large language models can be forgiven if they feel the responses are like magic. MIT's Technology Review even recently published an article titled "Nobody Knows How AI Works."
One thing that is known, though, is powering the advanced AI models captivating the world's attention requires massive amounts of energy. OpenAI's Sam Altman discussed this fact, warning that future advances in AI will consume significantly more power than people expect, saying "there&#8217;s no way to get there without a breakthrough."
As it stands, data centers around the world account for between 1-1.5% of global electricity use, according to the International Energy Agency.
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With the AI boom in its nascent days, Alex de Vries, Ph.D. candidate and data scientist at the Central Bank of the Netherlands, predicts that the AI sector alone will use about the same amount of electricity as the Netherlands uses a year by 2027.
Financial blog Zerohedge posted from its X account saying "those AI data centers won&#8217;t run on hopes and dreams," mocking hedge funds shorting energy stocks.
For investors interested in AI but concerned about lofty valuations in technology stocks, there could be opportunities in energy to play the AI boom.
The Vanguard Energy ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) has had a strong start to the year, up ~11%.
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For many in the tech industry, resorting to fossil fuels to further power tech isn't an optimal solution, especially as the world seeks to reach net zero by 2050.
Sam Altman is known for being at the forefront of AI, but he's also well positioned at what he sees as a possible breakthrough to address the energy crisis, saying "it motivates us to go invest more in fusion."
According to the International Atomic Energy Agency, "If nuclear fusion can be replicated on earth at an industrial scale, it could provide virtually limitless clean, safe and affordable energy to meet the world's demand."
Altman has invested $375 million into Helion, a private company seeking to commercialize nuclear fusion.
He's also helping nuclear fission startup, Oklo, to go public via AltC Acquisition Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ALCC#NYSE">ALCC</a>).
With many of the world's brightest minds working on problems in AI, other exciting companies are working to solve the power needs of these AI companies in a sustainable way.
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Sam Altman Warns AI Development Needs An Energy 'Breakthrough' As Financial Pundit Says 'AI Data Centers Won't Run On Hopes And Dreams'

Oil prices traded marginally lower during Monday morning&#8217;s Asian trading session as possibilities of a slowdown led by extended rate hikes by the&nbsp;Federal Reserve&nbsp;overshadowed&nbsp;<a target="_blank" href="https://www.benzinga.com/news/earnings/23/06/33081182/crude-oil-rises-over-1-feds-preferred-inflation-gauge-slows-in-may" rel="noreferrer noopener">fears of any supply constraints</a>.
What Happened:&nbsp;West Texas Intermediate futures for August delivery were down 0.16% at $70.53 per barrel, while Brent futures for September delivery traded 0.08% lower at $75.34 per barrel.
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Recent data released on Friday supported the case for further rate hikes by the Fed. Although headline PCE inflation continued to slow to 3.4% year-over-year, the core measure remained relatively unchanged at 4.6% year-over-year. Additionally, factory activity growth in China, the world&#8217;s largest crude importer, showed signs of slowing down in June, according to a Reuters report.
Supply Crunch Boost?&nbsp;Analysts also anticipate tighter supplies and a potential price boost in the second half of the year. Saudi Arabia pledged to cut an additional 1 million barrels per day of output in July, while the U.S. is replenishing its Strategic Petroleum Reserve, as reported. U.S. crude output declined in April to 12.615 million barrels per day, the lowest level since February, according to the U.S. Energy Information Administration.
Market attention will now turn to a conference hosted by the Organization of the Petroleum Exporting Countries (OPEC) later this week, which is expected to provide insights into future supply levels.
Price Action: On Friday, the&nbsp;United States Brent Oil Fund LP&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 1.15% higher, while the&nbsp;Vanguard Energy Index Fund ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) gained 0.68%.
Read Next: <a href="https://www.benzinga.com/news/23/07/33091575/investor-appeal-heightens-as-bond-market-swings-open-door-for-4-yield">Investor Appeal Heightens As Bond Market Swings Open Door For 4% Yield</a>

Commodities

Oil Market Starts July On Slippery Slope: Here Is A Key Factor To Watch Out For

Oil prices rose during Tuesday morning&#8217;s Asian trading session driven by <a href="https://www.benzinga.com/news/23/06/33009174/whats-next-for-russia-after-wagners-challenge-to-putin">geopolitical concerns surrounding Russia</a> and potential supply disruptions.
Prominent market commentator, Jim Cramer, indicated oil prices may not shoot much higher. ‘Don&#8217;t bite on oil going higher. It will just be another headfake as Russia has transactional friendships with China and India,' he <a href="https://twitter.com/jimcramer/status/1673142051653795840">said</a> in his tweet.
Also Read: <a href="https://www.benzinga.com/money/how-to-invest-in-oil">How To Invest In Oil</a>
Cramer's advice comes at a time when oil prices shot higher in the wake of an attempted mutiny by Wagner forces against Russian president Vladimir Putin. Although the situation quickly de-escalated, oil traders are holding themselves back from factoring in the relief.
Price Action: West Texas Intermediate futures maturing in August was trading 0.43% higher at $69.67 per barrel during Tuesday morning Asian trade. Brent futures maturing in August rose 0.34% to trade at $74.43 per barrel. The United States Brent Oil Fund LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 0.56% higher on Monday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) gained 1.65%, <a href="https://benzinga.grsm.io/xjrx9r9ce0uu">according to Benzinga Pro</a>.
It is notable that concerns surrounding extended rate hikes by central banks and the fears of a subsequent recession appear to be holding back any unreasonable gains in oil prices. The fears seem to be justified given the recent central banking developments. If the Federal Reserve indicated it will hike rates by another <a href="https://www.benzinga.com/economics/macro-economic-events/23/06/32861662/powell-hits-the-brakes-after-10-straight-interest-rate-increases-but-fed-signals-">50 basis points this year</a>, the Bank of England went ahead and implemented such a hike in its recent policy following a higher-than-expected inflation print for May in the U.K. But the focus recently has been on Russia.
Expert Take: ANZ Research said in a note that despite the rebellion being short-lived, there is likely to be increased focus on geopolitical issues in the coming months.
‘The oil market had become complacent as Russian oil continued to seep into the international market. This can't be assumed to the same extent following the weekend's events. This is likely to lead to a risk premium being applied to the oil price amid the risk of further civil unrest. However, for the moment, the impact is likely to be minimal,' it said according to a research note.
ANZ Research further noted that the market is slowly turning its focus to the upcoming driving season in the U.S. and said preliminary data suggests demand is rising strongly. ‘The American Automobile Association estimates 43m motorists will drive 50 miles or more from their homes this Independence Day weekend. That's 4% more than 2019,' it said.
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Jim Cramer On Oil Going Higher Amid Wagner Mutiny In Russia: 'Just Be Another Headfake'

Oil prices rose during Monday morning&#8217;s Asian trading session as investors and traders began digesting the impact of the <a href="https://www.benzinga.com/news/23/06/32999410/prigozhins-attempted-mutiny-against-russia-is-the-beginning-of-the-endgame-for-putin-says-expert">attempted mutiny</a> against Russian President Vladimir Putin while <a href="https://www.benzinga.com/news/23/06/32978843/janet-yellen-sees-lower-odds-of-us-recession-says-inflation-has-declined-significantly">worries about a global slowdown remained</a>.
West Texas Intermediate futures maturing in August rose 0.65% during Monday morning Asian trading session to trade at $69.68 per barrel. Brent futures maturing in August rose 0.73% to trade at $74.36 per barrel, <a href="https://benzinga.grsm.io/xjrx9r9ce0uu">according to Benzinga Pro</a>.
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Rystad Energy Senior Vice President Jorge Leon wrote in a note that the internal military struggle in Russia adds limited oil price pressure amid heightened tensions in Moscow, <a href="https://www.bloomberg.com/news/articles/2023-06-25/latest-oil-market-news-and-analysis-for-june-26?srnd=markets-vp&amp;leadSource=uverify%20wall">according</a> to a Bloomberg report. "We do, however, believe that the geopolitical risk amid internal instability in Russia has increased," Leon said.
Fears of a recession due to extended rate hikes amid sticky inflation appear to be balancing any upward price pressure due to geopolitical and supply risks. This is given the fact that Federal Reserve Chair Jerome Powell has indicated rates may be hiked by a further 50 basis points this year.
At the same time, higher-than-expected inflation and a subsequent surprise 50 basis points rate hike by the Bank of England seem to have unnerved investors who have begun weighing in on <a href="https://www.benzinga.com/news/23/06/32978843/janet-yellen-sees-lower-odds-of-us-recession-says-inflation-has-declined-significantly">the possibility of extended rate rises in the U.S</a>.
Supply Concerns: RBC Capital Markets analyst Helima Croft said there were worries that Putin would declare martial law that would stop workers from showing up to major loading ports and energy facilities, potentially impacting millions of barrels of exports, according to a Reuters report. 
&#8220;It is our understanding that the White House was actively engaged yesterday in reaching out to key domestic and foreign producers about contingency planning to keep the market well supplied if the crisis impacted Russian output,&#8221; she said in a note.
The United States Brent Oil Fund LP (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 0.16% lower on Friday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) shed 0.88%.
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Politics

How Oil Markets Reacted After Wagner Group Attempted Coup Against Vladimir Putin In Russia

GOP presidential candidate Tim Scott believes the best way to reduce gas prices at pumps is by ramping up energy production <a href="https://www.benzinga.com/government/22/11/29493279/biden-warns-big-oil-over-outrageous-profits-if-they-dont-pass-it-theyre-going-to-pay">and not by punishing producers</a>.
"The best way to bring down sky-high prices at the gas pump is by unleashing American energy production —not punishing energy producers. I am proud to work with my colleagues to help keep energy prices low for the American people," Scott said on Twitter.
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"> 
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<blockquote class="twitter-tweet" data-width="500" data-dnt="true">The best way to bring down sky-high prices at the gas pump is by unleashing American energy production —not punishing energy producers. I am proud to work with my colleagues to help keep energy prices low for the American people.<a href="https://t.co/7rO6pD1YO4">https://t.co/7rO6pD1YO4</a>
&mdash; Tim Scott (@SenatorTimScott) <a href="https://twitter.com/SenatorTimScott/status/1668709831966900225?ref_src=twsrc%5Etfw">June 13, 2023</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
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The Senator from South Carolina, along with eight of his Senate colleagues, introduced the Pay Less at the Pump Act, according to a statement. Scott's colleagues include Senators John Barrasso (R-Wyo.), Marsha Blackburn (R-Tenn.), John Hoeven (R-N.D.), James Lankford (R-Okla.), Mike Lee (R-Utah), Cynthia Lummis (R-Wyo.), Jim Risch (R-Idaho), and John Thune (R-S.D.).
"This legislation will lower energy prices for Americans by repealing the Inflation Reduction Act's reinstatement of the $10.5 billion "Superfund Tax" on crude oil and imported petroleum products. By overturning the Democrats' reckless tax hike on oil and petroleum products, the Pay Less at the Pump Act would bring down energy costs and fuel American energy independence," the <a href="https://www.scott.senate.gov/media-center/press-releases/scott-colleagues-introduce-bill-to-save-taxpayers-billions-at-the-pump-and-fuel-american-energy-independence">statement</a> said.
Price Action: Oil prices fell on Wednesday after data showed an unexpected rise in U.S. crude stocks, which indicated weak demand, according to a Reuters report. West Texas Intermediate futures maturing in July were trading 0.06% lower at $69.38 per barrel during Wednesday afternoon Asian trading session. On Wednesday, however, oil prices rose 3% after China&#8217;s central bank reduced a short-term lending rate for the first time in 10 months.
The United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 3.09% higher on Tuesday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) gained 0.56%, <a href="https://benzinga.grsm.io/xjrx9r9ce0uu">according to Benzinga Pro</a>.
Scott has been critical of President Joe Biden&#8216;s policies and has voiced his concerns about the current administration's economic stance. "With prices of everything from groceries to gas surging, it's clear that Bidenomics is not working. The American people need relief from this President's inflationary policies," Scott <a href="https://twitter.com/SenatorTimScott/status/1668333086072004608">said</a> in his tweet.
Read Next: <a href="https://www.benzinga.com/markets/equities/23/06/32848839/cramer-warns-latecomers-may-miss-out-on-non-tech-stocks-rally-no-big-gains-for-johnny-come-latel">Cramer Warns Latecomers May Miss Out On Non-Tech Stocks Rally—No Big Gains For &#8216;Johnny-Come-Latelies&#8217;</a>

Economics

Presidential Candidate Tim Scott Says Best To Unleash US Energy Production To Bring Down 'Sky High' Prices At Pumps

Goldman Sachs Group Inc., which has been among the most bullish banks on oil price outlook, has reportedly lowered its price forecasts once again in the wake of increasing <a href="https://www.benzinga.com/news/23/05/32617312/iran-is-a-responsible-player-says-opec-secretary-general-heres-what-he-said-on-the-nations-full-retu">global supplies and reducing demand</a>.
The bank has now lowered its Brent oil price forecast for December to $86 a barrel compared to its previous estimate of $95 a barrel, <a href="https://www.bloomberg.com/news/articles/2023-06-11/goldman-sachs-slashes-brent-outlook-to-below-90-by-year-end?srnd=premium-asia&amp;leadSource=uverify%20wall">according</a> to a Bloomberg report. This is Goldman's third downward price revision in six months.
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Oil prices declined on Monday as investors and traders remained cautious ahead of the Federal Reserve's <a href="https://www.benzinga.com/news/23/06/32790467/imf-says-fed-may-need-to-push-interest-rates-higher-for-longer-inflation-does-remain-a-pressing-conc">policy decision this week</a>. Brent futures maturing in August were trading 1.08% lower at $73.98 per barrel during Monday morning Asian trading session.
Supply increases from countries facing sanctions — Russia, Iran and Venezuela — are an important driver in the lower price outlook, according to Goldman. Russia&#8217;s supply production, in particular, has "nearly fully recovered" despite sanctions from the West, the report said.
"We have never been this wrong for this long without seeing evidence to change our views," Jeff Currie, Goldman's head of commodities research told Bloomberg TV last week.
Fed Policy: Recession fears are also having an impact on oil prices, with higher interest rates likely to be a "persistent headwind" to higher prices, wrote Goldman analysts including Callum Bruce and Currie in the note.
Market participants will be keenly watching out for any hints regarding the Fed's future policy path as further hikes will hurt an <a href="https://www.benzinga.com/economics/macro-economic-events/23/06/32719092/us-economy-alarmed-new-york-fed-indicates-highest-likelihood-of-recession-in-over">already weak U.S. economy</a>, leading to demand concerns from the world's largest oil consumer.
The United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 0.98% lower on Friday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) lost 0.63%.
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Cheaper Gas For The Holidays? Goldman Sachs Predicts Brent Oil Below $90 By Year-End

Concerns over the global economy dragged oil prices on Tuesday afternoon Asian trade after a knee-jerk surge the day before in the aftermath of the <a href="https://www.benzinga.com/news/23/06/32707274/saudi-arabia-announces-massive-oil-production-cut-minister-says-will-do-whatever-is-necessary-for-pr">unexpected production cut announced by Saudi Arabia</a>.
West Texas Intermediate futures maturing in July were trading 2.04% lower at $70.70 per barrel. Brent futures maturing in August were trading 1.67% lower at $75.42 per barrel. 
The fall in oil prices comes at a time when investors and traders are keenly awaiting the Federal Reserve's interest rate decision during its June policy meeting scheduled next week which will also give hints <a href="https://www.benzinga.com/news/23/06/32708241/imf-md-kristalina-georgiev-thinks-fed-isnt-done-with-rate-hikes-we-are-in-an-exceptionally-uncertain">about its future policy path</a>. The central bank's policy decisions will have a huge bearing on the demand outlook of the world's largest oil consumer U.S.
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The United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 0.078% higher on Monday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) lost 0.71%, <a href="https://benzinga.grsm.io/xjrx9r9ce0uu">according to Benzinga Pro</a>.
CMC Markets analyst Leon Li told Reuters that oil prices are still in a bear market. "&#8230;we can see that some advanced economies have already started to fall into recession such as Germany,&#8221; Li said.
Saudi Budget: The fall in oil prices is definitely not conducive for Saudi Arabia, a key member of OPEC+. According to an IMF report released in May, the kingdom won't balance its budget if oil is below $80 a barrel, <a href="https://www.bloomberg.com/news/articles/2023-05-03/saudi-arabia-needs-pricier-oil-to-balance-its-budget-imf-says#xj4y7vzkg">reported</a> Bloomberg. The fund's latest estimates put this year's breakeven oil price for the kingdom at $80.9, the report said.
It, therefore, does not come as a surprise that the Middle Eastern nation recently announced it will cut production by an extra one million barrels per day in July. 
The unexpected move by Saudi Arabia comes at the cost of ceding ground to two of its key allies including Russia, which made no commitment to trim output further, and the United Arab Emirates, which got a higher production quota for 2024.
Notably, Saudi Energy Minister Prince Abdulaziz bin Salman had stated he &#8220;will do whatever is necessary to bring stability to this market.&#8221;
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Oil Slides As Economic Worries Eclipse Saudi Output Cut — Why $80/Bbl Price Is Crucial For The Kingdom

Oil prices rose by over $2 per barrel during Monday morning&#8217;s Asian trading session after Saudi Arabia reportedly announced it will cut production by an extra <a href="https://www.benzinga.com/news/23/06/32706543/saudi-arabia-russia-extend-voluntary-cuts-until-end-of-2024-as-part-of-opec-deal">one million barrels per day in July</a>.
West Texas Intermediate futures maturing in July were trading 1.74% higher at $72.99 per barrel at the time of writing. Similarly, Brent futures maturing in August were trading 1.55% higher at $77.31 per barrel. The United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 2.88% higher on Friday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) gained 3.12%.
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The unexpected move by Saudi Arabia comes at the cost of ceding ground to two of its key allies including Russia, which made no commitment to trim output further, and the United Arab Emirates, which got a higher production quota for 2024, <a href="https://www.bloomberg.com/news/articles/2023-06-04/saudis-shoulder-burden-of-stabilizing-oil-market-with-extra-cuts">reported</a> Bloomberg. OPEC+ has agreed to extend the voluntary cuts it announced in April to the end of 2024.
Saudi Energy Minister Prince Abdulaziz bin Salman stated he "will do whatever is necessary to bring stability to this market."
The additional cuts announced on Sunday will bring Saudi production to nearly 9 million barrels a day in July, which is the lowest level witnessed since June 2021 when output was still recovering from the lows of the Covid-19 pandemic, the report said.
Expert Take: The additional cut could be extended further but the Saudis will keep the market "in suspense" about the decision according to Prince Abdulaziz. The minister has repeatedly<a href="https://www.benzinga.com/economics/macro-economic-events/23/05/32530281/saudi-energy-minister-warns-oil-short-sellers-they-will-be-ouching-ahead-of-opec-"> cautioned bearish oil speculators.</a>
Bob McNally, president of consultant Rapidan Energy Group, told Bloomberg for the near term, crude prices will largely depend on a test of wills. It will be a battle between stability-seeking Saudi Arabia and bearish paper traders," he said.
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Saudi Arabia Announces Massive Oil Production Cut, Minister Says 'Will Do Whatever Is Necessary' For Price Stability

Oil prices rose during Thursday afternoon Asian trade after the <a href="https://www.benzinga.com/economics/macro-economic-events/23/05/32662042/hurrah-house-passes-debt-ceiling-deal-biden-urges-senate-to-pass-legislation-quic">passage of the debt ceiling bill</a> in the House brought relief to traders. West Texas Intermediate futures maturing in July were trading 0.6% higher at $68.6 per barrel, at the time of writing.
Another factor that helped lift prices was the fact that Federal Reserve officials on Wednesday indicated a potential rate hike &#8220;skip&#8221; in June, reversing market <a href="https://www.benzinga.com/news/23/05/32641072/feds-loretta-mester-sees-no-compelling-reason-to-pause-rate-hike-we-may-have-to-go-further">expectations of an imminent hike</a> that could weaken economic growth and lead to a subsequent decline in oil demand.
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Fed Governor and vice chair nominee Philip Jefferson said any decision to hold rates steady should not be seen as the end of the tightening cycle, according to a Reuters report. A section of the market appeared to view these comments as a message from the central bank's leadership <a href="https://www.benzinga.com/news/23/05/32611720/feds-goolsbee-believes-inflation-still-higher-than-where-it-needs-to-be-we-are-improving-havent-succ">about the upcoming policy</a>.
However, strong labor data released on Wednesday countered these expectations about a pause. There were 1.8 job openings for every unemployed person in April, <a href="https://www.benzinga.com/markets/equities/23/05/32662006/tesla-c3-ai-salesforce-crowdstrike-okta-why-these-5-stocks-are-drawing-investor-attention-today">up from 1.7 in the previous month</a>.
The United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 2.28% lower on Wednesday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) lost 1.79%.
OPEC Intervention: Analysts believe the recent sell-off in crude oil markets has led to speculation that The Organisation of the Petroleum Exporting Countries and its allies, known as OPEC+, <a href="https://www.benzinga.com/news/23/05/32617312/iran-is-a-responsible-player-says-opec-secretary-general-heres-what-he-said-on-the-nations-full-retu">will intervene to support prices</a>.
"We don't expect the group to announce production cuts at the 4 June meeting, but bullish rhetoric is likely to continue as it waits to see the impact of the current production agreement and Chinese demand growth," ANZ Research said in a note. OPEC+ is scheduled to meet June 3-4 in Vienna.
Oil prices are also facing bearish supply-side factors. U.S. crude oil inventories rose by about 5.2 million barrels last week, reported Reuters, citing market sources. Market participants are now eyeing government data on U.S. crude stocks scheduled to be released later on Thursday.
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How Oil Markets Reacted After House Cleared Debt Ceiling Bill: Crucial Data Due On Thursday

Haitham Al-Ghais, the Secretary General of the Organization of the Petroleum Exporting Countries (OPEC), has reportedly said the alliance will welcome Iran's full return <a href="https://www.benzinga.com/news/23/05/32611807/debt-ceiling-deal-heres-how-oil-gold-reacted-after-biden-mccarthy-reached-an-agreement">to the oil market</a> when sanctions are lifted.
Al-Ghais, who is visiting Tehran for the first time, stated Iran has the capacity to bring on significant production volumes within a short period of time, according to a Reuters report that cited the Iranian oil ministry&#8217;s website SHANA.
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&#8220;We believe that Iran is a responsible player amongst its family members, the countries in the OPEC group. I am sure there will be good work together, in synchronization, to ensure that the market will remain balanced as OPEC has continued to do over the past many years,&#8221; Al-Ghais said.
When asked about the <a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/04/31640827/oil-prices-surge-following-opec-production-cut-analyst-unveils-5-top-oil-stock-pick">alliance's decision to cut production</a> and its impact on oil prices, Al-Ghais said OPEC doesn't target a certain price level. "All our actions, all our decisions are made in order to have a good balance between global oil demand and global oil supply," he said, according to the report.
Price Action: Oil was trading higher during Tuesday morning&#8217;s Asian trading session. West Texas Intermediate futures maturing in July were trading 0.14% higher at $72.78 per barrel, at the time of writing. The United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 1.21% higher on Friday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) lost 0.42%, <a href="https://benzinga.grsm.io/xjrx9r9ce0uu">according to Benzinga Pro</a>.
Last week, Russia's Deputy Prime Minister Alexander Novak stated OPEC+ wasn't likely to take further measures <a href="https://www.benzinga.com/markets/commodities/23/05/32589365/russias-deputy-pm-has-this-to-say-on-upcoming-opec-meeting-in-vienna">at its gathering in Vienna in June</a>. The OPEC+ alliance is scheduled to meet June 3-4 in Vienna.
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'Iran Is A Responsible Player,' Says OPEC Secretary General: Here's What He Said On The Nation's Full Return To Oil Market

With President Joe Biden and House Speaker Kevin McCarthy reaching <a href="https://www.benzinga.com/government/23/05/32610557/biden-says-good-news-for-america-as-president-kevin-mccarthy-agree-on-tentative-debt-deal-to-avert-c">a tentative deal on the borrowing</a> limit, gold and oil have moved in different directions.
Oil prices rose in Monday morning&#8217;s Asian trading session as the world's largest oil consumer reached a deal to avert a default on its national debt. West Texas Intermediate futures maturing in July were trading over 1% higher at $73.42 per barrel at the time of writing. The United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 1.21% higher on Friday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) lost 0.42%, <a href="https://benzinga.grsm.io/xjrx9r9ce0uu">according to Benzinga Pro</a>.
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Oil's rise on Monday comes after a sluggish week when prices declined after Russia's Deputy Prime Minister Alexander Novak stated OPEC+ wasn't likely to take further measures <a href="https://www.benzinga.com/markets/commodities/23/05/32589365/russias-deputy-pm-has-this-to-say-on-upcoming-opec-meeting-in-vienna">at its gathering in Vienna in June</a>.
Novak's remarks stood in contrast to warnings from Saudi Energy Minister Prince Abdulaziz bin Salman's earlier last week. "I keep advising them that they will be ouching — they did ouch in April," the <a href="https://www.benzinga.com/economics/macro-economic-events/23/05/32530281/saudi-energy-minister-warns-oil-short-sellers-they-will-be-ouching-ahead-of-opec-">Minister cautioned speculators</a>, while speaking at the Qatar Economic Forum in Doha on Tuesday. "I would just tell them: Watch out!" he said. The OPEC+ alliance is scheduled to meet June 3-4 in Vienna.
Gold: The debt ceiling deal, however, did not augur well for bullion prices as the commodity's safe haven status took a back seat with the crisis getting closer to resolution. Spot gold was trading 0.11% lower during Monday morning Asian trade at levels close to $1,944 per ounce.
Analysts from Guotai Junan Securities said in a research note that gold will likely continue to fall if the Biden-McCarthy debt-ceiling deal is approved by both houses of Congress before the "X-date, according to <a href="https://www.wsj.com/articles/gold-falls-as-optimism-rises-on-u-s-debt-ceiling-deal-58cd0e0e">The Wall Street Journal</a>.
The SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>) closed 0.4% higher on Friday while the iShares Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IAU#NYSE">IAU</a>) gained 0.44%.
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Debt Ceiling Deal — Here's How Oil, Gold Reacted After Biden, McCarthy Reached An Agreement

Oil prices continued to fall after registering close to a 3% decline on Thursday after Russia indicated The Organisation of the Petroleum Exporting Countries and its allies, known as OPEC+, weren't likely <a href="https://www.benzinga.com/news/23/04/31624195/opec-just-announced-oil-output-cuts-in-a-surprise-move-heres-how-it-could-really-affect-you">to alter production levels</a> at its next meeting.
Russia's Deputy Prime Minister Alexander Novak stated OPEC+ wasn't likely to take further measures at its gathering in Vienna in June, <a href="https://www.bloomberg.com/news/articles/2023-05-25/crude-oil-prices-hold-decline-as-investors-digest-moscow-s-message-on-opec?srnd=markets-vp&amp;leadSource=uverify%20wall">according</a> to a Bloomberg report.
Price Action: West Texas Intermediate futures maturing in July were trading 0.11% lower at $71.77 per barrel during Friday afternoon Asian trading session. The United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 2.25% lower on Thursday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) lost 1.89%. Oil prices have been on a downward trend since mid-April and have not been able to breach the $80 per barrel mark on the upside.
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Novak's remarks stood in contrast to warnings from Saudi Energy Minister Prince Abdulaziz bin Salman's <a href="https://www.benzinga.com/economics/macro-economic-events/23/05/32530281/saudi-energy-minister-warns-oil-short-sellers-they-will-be-ouching-ahead-of-opec-">earlier during the week</a>.
"I keep advising them that they will be ouching — they did ouch in April," the Minister cautioned speculators, while speaking at the Qatar Economic Forum in Doha on Tuesday. "I would just tell them: Watch out!" he said. OPEC+ alliance is scheduled to meet June 3-4 in Vienna.
Crude oil has lost over 10% this year as downbeat economic recovery in top importer China and an <a href="https://www.benzinga.com/economics/macro-economic-events/23/05/32534993/what-to-watch-when-fomc-minutes-drop-pain-for-stocks-bonds-looms-if-market-expect">aggressive monetary policy</a> action by the Federal Reserve put pressure on the prices.
Outlook: James Whistler, Managing Director at Vanir Global Markets Pte told Bloomberg, while referring to the comments from Russia, oil lost recent gains amid OPEC's reluctance to cut production further. "We see things softening a bit further from here as cautious sentiment permeates the markets," he said.
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Russia's Deputy PM Has This To Say On Upcoming OPEC+ Meeting In Vienna

Oil is on track to register first weekly gains in over a month as market participants remain optimistic Congress will find a resolution to the <a href="https://www.benzinga.com/news/23/05/32480292/wall-streets-trillion-dollar-headache-will-arrive-when-debt-ceiling-crisis-gets-resolved-heres-how">impending debt limit impasse</a>.
West Texas Intermediate futures maturing in July are trading higher by close to 1% at $72.62 per barrel during Friday afternoon Asian trading session. Brent futures expiring in July registered similar gains to trade at $76.58 per barrel.
President Joe Biden has reportedly urged his negotiators to keep following a debt-limit deal after House Speaker Kevin McCarthy indicated both parties may reach an agreement as soon as this weekend. Crude purchased by some Asian refiners also added to the bullish sentiment, <a href="https://www.bloomberg.com/news/articles/2023-05-19/crude-oil-prices-set-for-best-week-since-mid-april-on-us-debt-deal-optimism">reported</a> Bloomberg.
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The United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 1.12% lower on Thursday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) gained 0.78%, <a href="https://benzinga.grsm.io/xjrx9r9ce0uu">according to Benzinga Pro</a>.
Recession Fears: Yeap Jun Rong, a market strategist for IG Asia Pte. told Bloomberg that oil prices seem to be taking its cue from the broader risk environment. Optimism about debt ceiling talks, the upcoming U.S. summer driving season and the nation's plan to replenish its Strategic Petroleum Reserve (SPR) could lend support to futures, he added.
However, fears of a recession – a major factor driving oil demand &#8212; are still prevalent among market participants with contrarian opinions on the Federal Reserve's future policy path doing rounds. For instance, Johanna Chua, chief APAC economist at Citigroup Global Markets, reportedly said inflation is likely to be quite persistent and the Fed may go for <a href="https://www.benzinga.com/news/23/05/32308941/citigroup-global-markets-economist-says-2-more-rate-hikes-lined-up-we-think-the-feds-not-done-until">two more rate hikes in coming times</a>.
At the same time, JPMorgan Asset Management is of the view that a recession in the U.S. is a virtual certainty and the central bank is likely to cut interest rates by the <a href="https://www.benzinga.com/news/23/05/32439419/jpmorgan-asset-management-executive-believes-market-is-right-to-be-penciling-in-rate-cuts">third quarter as growth fizzles out.</a>
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Here's What's Happening To Oil As Debt Ceiling Crisis Drags On

The Department of Energy has issued a solicitation for sour crude oil as it seeks to purchase up to 3 million barrels of oil for the <a href="https://www.benzinga.com/news/23/02/30891803/us-to-release-26m-barrels-of-crude-oil-from-strategic-petroleum-reserve">Strategic Petroleum Reserve (SPR)</a> in continuation of the Biden-Harris Administration's three-part replenishment plan.
The DOE said in a statement that it aims to repurchase crude at a lower price than the average of about $95 per barrel it was sold for in 2022. It also highlighted its intention to purchase more oil later this year.
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A previous attempt to refill the stockpile via a 3 million-barrel purchase was canceled by the Energy Department in January after the agency said offers were either too expensive or didn't meet other specifications, a Bloomberg <a href="https://www.bloomberg.com/news/articles/2023-05-15/us-plans-to-buy-3-million-barrels-of-oil-for-emergency-reserve">report</a> stated. 
The reserve holds about 360 million barrels of oil at present which is about half of its total capacity, the report added citing Energy Department data.
Price Action: The sour crude grades sought by the Energy Department are already in high demand in the wake of <a href="https://www.benzinga.com/news/23/04/31625206/oil-prices-surge-over-5-in-asia-trade-following-surprise-opec-production-cut-these-etfs-could-draw-i">production cuts by OPEC+</a>, according to the report. As a result, oil traders keenly watch out for any possible action from the government in regard to replenishing the SPR.
West Texas Intermediate futures maturing in June were trading 0.31% higher at $71.30 per barrel at the time of writing. The United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 1.52% higher on Monday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) gained 0.69%.
The Energy Department also said it has secured the cancellation of 140 million barrels in congressionally mandated sales scheduled for fiscal years 2024 through 2027.
"This cancellation has already led to significant progress toward replenishment and will allow the SPR to have the same number of barrels in reserve by the end of FY 2027 that it would have had emergency barrels not been sold in 2022," it explained.
To keep track of all upcoming economic events that can impact the markets, please access the <a href="https://benzinga.grsm.io/xjrx9r9ce0uu">Benzinga Pro calendar</a>.
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Government

US To Replenish Strategic Petroleum Reserve With 3M-Barrel Buy: How Oil Market Reacted

Oil prices slipped during Monday morning Asian trade as concerns about demand at top oil-consuming nations U.S. and China negated positive factors like a reduction in oil supplies due to <a href="https://www.benzinga.com/news/23/04/32038023/remember-opec-surprise-production-cut-now-recession-fears-drag-oil-prices-back-to-square-one">OPEC+ production cuts.</a>
West Texas Intermediate futures maturing in June were trading 0.46% lower at $69.72 per barrel at the time of writing. The United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 1.73% lower on Friday while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) gained 0.23%.
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The fear of a potential U.S. default on national debt is also looming high as no conclusion has been reached following last week's talks between President Joe Biden, House Speaker Kevin McCarthy <a href="https://www.benzinga.com/government/23/05/32382274/biden-to-continue-debt-ceiling-talks-with-congressional-leaders-tuesday-says-i-am-a-congenital-optim">and senior Congressional leaders.</a>
An interesting development statement came from the Middle East. Iraq does not expect the Organization of the Petroleum Exporting Countries and their allies including Russia (OPEC+) to make further reductions to oil output at its next meeting in June, its oil minister Hayan Abdel-Ghani said, reported Reuters.
However, global crude supplies could tighten during the second half of the year as the OPEC+ are making additional output cuts that is bringing down sour crude availability, the report said.
Expert Take: CMC Markets analyst Tina Teng told Reuters <a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/05/32266152/goldman-sachs-reiterates-100-brent-price-forecasts-expects-oil-to-rally-if-us-avoid">oil prices are still</a> under pressure on sluggish demand outlooks as China's economic reopening progress seems bumpy. Investors will now focus on China&#8217;s slew of economic data on industrial output, fixed assets investment, and retail sales for signs of oil demand improvement, she said.
"The impact of OPEC's 1.6mb/d cut to output remains underwhelming. For the moment, further cuts to production are off the table," ANZ Research said in a note.
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US Debt Crisis, Chinese Demand Worries Drag Oil Prices In Early Trade: What You Need To Know

Gold prices rose on Monday as the dollar declined slightly with investors bracing for the release of the consumer price inflation data on Tuesday that will pave the way for the <a href="https://www.benzinga.com/amp/content/32193974">Federal Reserve's future monetary policy</a>.
What Happened: Spot gold was trading 0.36% higher near the $2,023 per ounce level during Monday morning Asian trading session, while dollar index trended lower by 0.11%, making the yellow metal attractive to offshore buyers. 
The SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>) and the iShares Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IAU#NYSE">IAU</a>) <a href="https://www.benzinga.com/markets/cryptocurrency/23/05/32257779/rich-dad-poor-dad-author-highlights-record-yield-on-1-month-t-bill-omg-stick-with-gold-sil">closed over 1.5% lower on Friday</a>.
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Tim Waterer, chief market analyst at KCM Trade, told Reuters that any signs of inflation being subdued would hinder the dollar due to lower interest rate expectations from the central bank, which could see gold trend higher.
Furthermore, other factors that could impact gold prices are the banking sector health in the U.S. as well as the debt ceiling crisis. Till either of these continue to persist, the safe haven appeal of gold will continue to attract investor interest, <a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/05/32232263/peter-schiff-spots-great-divergence-in-gold-bank-stocks-old-fortunes-will-be-lost-a">pushing prices higher</a>.
Oil: Strong labor data released on Friday calmed recessionary fears to some extent which boosted oil prices. West Texas Intermediate futures expiring in June was trading 0.6% higher at $71.76 per barrel on Monday morning. WTI prices are still below the highs of <a href="https://www.benzinga.com/trading-ideas/technicals/23/04/31771979/oil-hits-18-week-highs-after-us-inflation-data-print-granholm-open-to-spr-refills">over $83 per barrel level attained in mid-April</a> this year. The level has witnessed a strong resistance this year.
Inflation data release in the U.S. and China, among other economic indicators, will be keenly watched out by oil traders this week.
Meanwhile, Brent futures expiring in July 2023 were trading 0.53% higher at $75.72 per barrel at the time of writing. The United States Brent Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BNO#NYSE">BNO</a>) closed 3.99% higher while the Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) gained 2.81% on Friday.
Tina Teng, an analyst at CMC Markets said oil&#8217;s rebound follows energy stocks&#8217; comeback on Wall Street on Friday after the U.S. reported strong job data that eased concerns about an imminent economic recession. "Crude prices may continue to take the rebounding tailwind," Teng said, according to a Reuters report.
ANZ Research pointed out that the market focus will shift to the tightening oil supply and <a href="https://www.benzinga.com/news/23/04/31625206/oil-prices-surge-over-5-in-asia-trade-following-surprise-opec-production-cut-these-etfs-could-draw-i">that OPEC+ output cuts</a> and a rebound in China's demand will likely offset slower demand elsewhere. "We still expect overall demand to grow by 2mb/d, keeping the market under-supplied through this year. Therefore, we expect prices to bottom-out soon," it said.
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What's Driving Gold, Oil Prices Higher Today?

As the balance of power between China and the U.S. continues to shift, heads of state across the globe are making choices to either steer away or get closer to each of the world's two largest economies.
In South East Asia and the Middle East, a trend to reduce reliance on the U.S. and a decades-old dependence on the U.S. dollar is gaining traction, as Saudi Arabia and ASEAN countries propose new measures.
<h3 class="wp-block-heading">Asian Countries Want Out Of The Dollar Dependence</h3>
On Tuesday, Malaysia's Prime Minister Anwar Ibrahim said that China is open to talks on the creation of an Asian Monetary Fund, in an effort to gain independence from the U.S.-led International Monetary Fund.&nbsp;
The U.S. is the largest financial contributor to the IMF, as well as the largest voting bloc, which makes the international body subject to the U.S. domestic interests, as it holds effective veto power over many of the fund's decisions.
"There is no reason for Malaysia to continue depending on the dollar," the prime minister told the Malaysian parliament on Tuesday.
Anwar resurfaced the idea of an Asian Monetary Fund at the Boao forum in the Hainan province of China last week, <a href="https://www.bloomberg.com/news/articles/2023-04-04/malaysia-china-to-discuss-asian-fund-to-cut-dollar-dependency">reported</a> Bloomberg.
The fund was first proposed by the Japanese government during the 1997 Asian financial crisis, but was never implemented.
Recent Fed policies on hiking interest rates have caused the U.S. dollar to strengthen in the global market. This is causing pain in countries that rely on dollar prices for international commerce, as is the case for many in the Southeast Asia region.
Last week, a meeting of ASEAN finance ministers and central bank governors had the issue of reducing dependency on the U.S. dollar, euro, yen, and British pound from financial transactions at the top of its agenda.
The Association of Southeast Asian Nations, is a political and economic union composed of 10 countries in Southeast Asia, including Malaysia, Indonesia, Thailand and the Philippines. The meeting highlighted the need to move to a local currency transaction scheme.
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The Global X FTSE Southeast Asia ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ASEA#NYSE">ASEA</a>), which follows the FTSE ASEAN Index, tracking the performance of companies from Indonesia, Philippines, Vietnam, Malaysia, Thailand and Singapore, is up 3.4% in the past month and over 9% in the last 6 months.
In the meeting, Indonesian President Joko Widodo urged his counterparts to gradually stop using foreign payment systems, including U.S.-based Visa Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/V#NYSE">V</a>) and Mastercard Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MA#NYSE">MA</a>).
Moving away from Western payment systems is necessary to protect transactions from "possible geopolitical repercussions," Widodo said, according to an official <a href="https://www.aseanbriefing.com/news/asean-finance-ministers-and-central-banks-consider-dropping-us-dollar-euro-and-yen-indonesia-calls-for-phasing-out-visa-and-mastercard/">report</a>.
Out of the 10 countries in the trade association, only Singapore has instituted sanctions on Russia after its invasion of Ukraine.  
Widodo said that countries in the region need to become protected from the consequences of financial sanctions by the U.S. and the European Union on Russia.
<h3 class="wp-block-heading">Saudi Arabia's Crown Prince Doesn't Care About Pleasing The U.S. Anymore</h3>
Late last year, Saudi Arabia Crown Prince Mohammed bin Salman reportedly told associates that he was no longer interested in pleasing the U.S., as per a Wall Street Journal <a href="https://www.wsj.com/articles/saudi-arabias-oil-production-cuts-reflect-cost-of-reshaping-economy-7fb6e09c">report</a>. He said anything his country would do for the Western nation would need a favor in return.
On Sunday, a surprise OPEC+ announcement<a href="https://www.benzinga.com/news/23/04/31626681/u-s-decries-surprise-oil-cuts-by-saudi-opec-amid-uncertain-market-conditions-not-advisable"> to cut oil production by about 1.2 million barrels</a> proved that the prince's comments are more than words thrown to the wind.
Saudi Arabia is the largest oil producer in OPEC. The decision, which included a vote from Russia, and other OPEC-associated countries, garnered a response from the Biden administration, which deemed the cuts "not advisable."
Oil-focused ETFs reacted positively to the news of a cut in oil production, which is likely to bring oil prices up.
<ul>
<li>The United States Oil ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) jumped on Monday after the announcement and is up 8.4% in 5 days.</li>
<li>The broader Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>) also spiked on Monday and is now 4% higher in the past 5 days.</li>
<li>ProShares Ultra Bloomberg Crude Oil ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCO#NYSE">UCO</a>) is up 14% in 5 days following a major spike on Monday.</li>
</ul>
Now Read: <a href="https://www.benzinga.com/news/23/04/31684804/jim-cramer-trashes-palantir-c3-ai-says-they-arent-even-real-companies">Jim Cramer Trashes Palantir, C3.Ai, Says They Aren&#8217;t Even &#8216;Real Companies&#8217;</a>

ASEA

Breaking Up With The Buck: Saudi Arabia, Southeast Asian Nations Swipe Left On US Dollar Dependence

Treasury Secretary Janet Yellen reportedly said the surprise <a href="https://www.benzinga.com/news/23/04/31625206/oil-prices-surge-over-5-in-asia-trade-following-surprise-opec-production-cut-these-etfs-could-draw-i">OPEC+ oil production cut</a> is an &#8220;unconstructive act&#8221; that will add uncertainty to the global growth outlook and burden consumers when inflation remains high.
What Happened: &#8220;I think it&#8217;s a regrettable action that OPEC decided to take,&#8221; Yellen told reporters, according to a Reuters report. She also said it was too early to assess what the price impact would be.
Also Read: <a href="https://www.benzinga.com/best-penny-stocks">Best Penny Stocks</a>
Yellen pointed out that a decline in gasoline prices from last year&#8217;s peaks <a href="https://www.benzinga.com/news/23/03/31607473/feds-preferred-inflation-measure-comes-in-cooler-than-expected-as-banking-crisis-complicates-powells">had helped rein in inflation</a> and it would be detrimental if the trend were reversed, according to the report. 
&#8220;Clearly, it&#8217;s not a positive for global growth,&#8221; she said. &#8220;And it adds to uncertainty and burdens at a time when inflation is already high&#8221;.
Price Action: Oil prices soared on Monday after the OPEC+ trimmed oil production by 1.16 million barrels per day beginning May, in a surprise move.
West Texas Intermediate (WTI) futures expiring in May were trading higher by 0.5% at $80.82 per barrel during Tuesday morning Asian trade while Brent futures expiring in June were trading 0.47% higher at $85.33 per barrel at the time of writing.
The United States Oil ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) had closed 5.76% higher on Monday while the Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) ended 4.53% higher. Other ETFs that recorded gains include Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>), SPDR S&amp;P Oil &amp; Gas Equipment &amp; Services ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XES#NYSE">XES</a>) and Invesco S&amp;P SmallCap Energy ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PSCE#NASDAQ">PSCE</a>).
Price Cap: Asked about the impact the production cut would have on the $60 per barrel price cap imposed by Western governments on Russian crude, Yellen said she did not see any significant impact on the <a href="https://www.benzinga.com/news/22/10/29428985/bidens-team-said-to-be-reworking-russian-oil-price-cap-plan-on-mounting-skepticism-few-commitments">appropriate level of the price cap.</a>
&#8220;I see it as working,&#8221; Yellen stated about the price cap, while also noting that it has led to steep discounts on Russian oil and increased bargaining power for purchasers. The <a href="https://www.benzinga.com/government/23/03/31596550/janet-yellen-urges-additional-banking-sector-reforms-to-ensure-financial-stability">Treasury Secretary also said</a> she does not see revisiting the price cap as appropriate at this time.
Read Next: <a href="https://www.benzinga.com/economics/macro-economic-events/23/04/31647942/el-erian-says-he-couldnt-remember-a-time-when-markets-were-so-dismissive-of-feds-">El-Erian Says He Couldn&#8217;t Remember A Time When Markets Were &#8216;So Dismissive&#8217; Of Fed&#8217;s Forward Guidance</a>

Macro Economic Events

PSCE

SPDR S&P Oil & Gas Equipment & Services ETF

Yellen Says OPEC+ Production Cut 'Unconstructive' And 'Burdens At A Time When Inflation Is Already High'

Oil prices soared during Monday morning in Asian trade after The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, trimmed <a href="https://www.benzinga.com/news/23/04/31624195/opec-just-announced-oil-output-cuts-in-a-surprise-move-heres-how-it-could-really-affect-you">oil production by 1.16 million barrels per day beginning May, in a surprising move.</a>
What Happened: Saudi Arabia will voluntarily cut output by 500,000 bpd from May until the end of 2023. The voluntary cuts begin from May and last until the end of the year. The pledges bring the total volume of reductions by OPEC+ to 3.66 million bpd, which is equal to 3.7% of global demand, according to Reuters calculations.
Also Read: <a href="https://www.benzinga.com/money/best-oil-etfs">Best Oil ETFs</a>
West Texas Intermediate (WTI) futures expiring in May rose 5.3% to trade at $79.67 per barrel while Brent futures expiring in June soared 5.18% to trade at $84.03 per barrel at the time of writing.
The United States Oil ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) had closed 1.71% higher on Friday while the Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) had ended 0.69% higher last week, ahead of the announcement. Other ETFs that are expected to gain attention in the wake of the development include Vanguard Energy Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDE#NYSE">VDE</a>), SPDR S&amp;P Oil &amp; Gas Equipment &amp; Services ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XES#NYSE">XES</a>) and Invesco S&amp;P SmallCap Energy ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PSCE#NASDAQ">PSCE</a>).
Expert Take: Giacomo Romeo, an equity analyst with Jefferies, <a href="https://www.bloomberg.com/news/articles/2023-04-02/oil-surges-after-opec-makes-unexpected-crude-production-cut?srnd=premium-asia">told</a> Bloomberg that the new cut, if fully implemented by the group, should allow material inventory draws already in second quarter. That's ahead of the third quarter, as previously expected, he said.
In October 2022, OPEC+ had decided on an output cut of two million barrels per day from November till the end of the year, a move that had angered Washington.
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Oil Prices Surge Over 5% In Asia Trade Following Surprise OPEC+ Production Cut: These ETFs Could Draw Interest

Saudi Arabia&rsquo;s energy minister,&nbsp;Prince Abdulaziz bin Salman,&nbsp;reportedly said on Monday that decisions by the <a href="https://www.benzinga.com/government/22/10/29196784/treasury-secretary-janet-yellen-says-opec-decision-unhelpful-and-unwise-for-global-economy-report">Organization of the Petroleum Exporting Countries and its allies (OPEC+)</a> are not politicized and are based on market fundamentals, adding that the alliance is sufficiently flexible to adjust policy as required.
Bin Salman was speaking at a media forum in Saudi Arabia&rsquo;s capital Riyadh about last October&#39;s decision to trim the group&#39;s production target by 2 million barrels per day, reported Reuters.
Also Read: <a href="https://www.benzinga.com/money/best-oil-etfs">Best Oil ETFs</a>
He had asserted in an interview with Energy Aspects last week the decision was locked in for the rest of the year, the Reuters report said.
Oil prices climbed over 1% on Monday led by optimism over Chinese demand, continued production curbs by major producers and Russia&#39;s plans to tighten supply. On Tuesday morning&#39;s Asia session, the commodity was trading lower.
Price Action: Brent crude futures were trading 0.8% lower at $83.39 a barrel while U.S. West Texas Intermediate crude (WTI) futures last rose 0.41% to $76.65.
The United States Brent Oil Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/bno#NYSE">BNO</a>) closed 2.01% lower on Friday while the Vanguard Energy Index Fund ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vde#NYSE">VDE</a>) closed 3.67% lower.
OPEC has raised its 2023 global oil demand growth forecast due to <a href="https://www.benzinga.com/markets/asia/22/12/30198883/china-to-open-borders-drop-covid-19-restrictions-what-you-need-to-know">China&#39;s relaxation of COVID-19 restrictions</a> and reduced supply forecasts for Russia and other non-OPEC producers, according to its monthly report. Global oil demand will increase this year by 2.32 million barrels per day or 2.3%, the OPEC said on Tuesday in a monthly report.
Read Next: <a href="https://www.benzinga.com/news/23/02/30979982/rob-reich-brings-up-wealth-gap-issue-again-after-inequality-report-if-that-doesnt-convince-you">Rob Reich Brings Up Wealth Gap Issue Again After Inequality Report: &#39;If That Doesn&#39;t Convince You...&#39;</a>

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<a href="https://investorplace.com">InvestorPlace - Stock Market News, Stock Advice &amp; Trading Tips</a>
While few market experts might not want to admit it, exchange-traded funds may be the best approach to long-term market success, thus driving the case for ETFs to buy for diversification.



The Financial Times may have said it the best last year. It wrote an article with the headline, &ldquo;It&rsquo;s 2023 and fund managers still suck.&rdquo; A Jefferies note revealed that only 43% of active equity managers outperformed their benchmarks. So, why not just get shares of the benchmarks?



That seems the logical thing to do. And hey, wouldn&rsquo;t you know? That&rsquo;s the theme for these ETFs to buy for diversification.



<h2>Global X Artificial Intelligence &amp; Technology ETF (AIQ)</h2>



<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2021/05/etf-pushpin-1600-300x169.jpg" alt='close-up of the phrase "exchange traded fund" on three colorful papers pinned to a wall by colorful pushpins'><div>Source: shutterstock.com/bangoland</div></div>If electric vehicles are the future of mobility, then artificial intelligence may be the future of computing. However, knowing which AI play to go for isn&rsquo;t easy. Yes, you can buy up shares of Nvidia (NASDAQ:<a href="https://investorplace.com/stock-quotes/nvda-stock-quote/">NVDA</a>). But at this juncture and this valuation, it&rsquo;s a difficult call &mdash; arguably even so for the ardent bull. Fortunately, investors have the Global X Artificial Intelligence &amp; Technology ETF (NASDAQ:<a href="https://investorplace.com/stock-quotes/aiq-stock-quote/">AIQ</a>) on their side.



Rather than guess which AI-related idea will flourish, the AIQ wagers on all the majors. Along with Nvidia, Meta Platforms (NASDAQ:<a href="https://investorplace.com/stock-quotes/meta-stock-quote/">META</a>) and Amazon (NASDAQ:<a href="https://investorplace.com/stock-quotes/amzn-stock-quote/">AMZN</a>) constitute the top three holdings. The fund also features healthy exposure to legacy tech juggernaut IBM (NYSE:<a href="https://investorplace.com/stock-quotes/ibm-stock-quote/">IBM</a>). If you&rsquo;re looking for all things digital intelligence, this may be the canvas to go with.



The added benefit of including AIQ in your list of ETFs to buy for diversification is that if one of the overheated enterprises like Nvidia stumbles, the other players can help pick up the slack. This profile limits your upside potential, but it also limits your downside risk.



<h2>SPDR Portfolio S&amp;P 500 High Dividend ETF (SPYD)</h2>



<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2022/01/shutterstock_1917075950-300x169.png" alt="ETF Investment index funds concept with letter wooden blocks and lots of different currencies, ETFs to buy. Emerging markets ETFs"><div>Source: Eviart / Shutterstock.com</div></div>When looking at the headlines, it&rsquo;s difficult not to get a bit jittery about your investments. For one thing, we just passed a significant moment regarding tensions in the Middle East. While cooler heads have prevailed, a miscalculation could quickly spiral circumstances out of control. But that&rsquo;s not the only global flashpoint that brings us to the SPDR Portfolio S&amp;P 500 High Dividend ETF (NYSEARCA:<a href="https://investorplace.com/stock-quotes/spyd-stock-quote/">SPYD</a>).



Rather than attempting to find out which enterprises pay &ndash; and pay well &ndash; you can let the SPYD fund do the work. Under its top holdings, the ETF features a wide range of businesses, from toy manufacturers to automakers to utility giants. I can easily make a bullish case for most companies in the top 10 without getting creative.



Looking at the sector weightings, it must be said that the SPYD leans heavily in three areas: real estate, financial services and utilities. However, the SPYD is truly one of the ETFs to buy for diversification because it adequately includes the enterprises that should be the most insulated during challenging market cycles.



<h2>Vanguard Energy ETF (VDE)</h2>



<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2022/06/etf-1600-2-300x169.png" alt="Blocks that spell out ETF in front of jar with money and change."><div>Source: SHUN_J / Shutterstock</div></div>I believe the Vanguard Energy ETF (NYSEARCA:<a href="https://investorplace.com/stock-quotes/vde-stock-quote/">VDE</a>) is one of the top ETFs to buy for diversification. The modern world needs energy. None of the tech we celebrate so much amounts to anything without energy. And it&rsquo;s also true that the world continues to run on oil.



That&rsquo;s the uncomfortable truth that should catapult VDE higher. Indeed, it&rsquo;s already up almost 14% since the start of the year. However, I believe the ride is just getting started. That&rsquo;s because irrespective of whatever happens in the Middle East, Russia&rsquo;s invasion of Ukraine &ndash; and Ukraine&rsquo;s response in attacking Russian energy infrastructure &ndash; should lead to global hydrocarbon supply disruptions.



In my opinion, crude oil prices will inevitably rise. And with the possibility that the Middle East could devolve into serious conflict, every component of the hydrocarbon value chain &ndash; upstream, midstream, downstream &ndash; may see demand spikes.



That&rsquo;s going to make VDE very compelling. If you need another reason to consider it, its <a href="https://money.usnews.com/funds/etfs/equity-energy/vanguard-energy-etf/vde">expense ratio</a> is cheap at 0.1%. Keep this on your radar.



On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article.&nbsp;The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com&nbsp;<a href="https://investorplace.com/corporate/investorplace-publishing-guidelines/" target="_blank">Publishing Guidelines</a>.
<div>A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.</div><h3>More From InvestorPlace</h3>
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The post <a href="https://investorplace.com/2024/04/diversification-dynamos-3-etfs-to-instantly-fortify-your-portfolio/">Diversification Dynamos: 3 ETFs to Instantly Fortify Your Portfolio</a> appeared first on <a href="https://investorplace.com">InvestorPlace</a>.