Oil prices have been gaining momentum in trading today as traders anticipate a production freeze this weekend when major producers meet in Doha, Qatar. Oil markets have been oversupplied, which has led to a collapse in prices. However, several producers are now strongly considering production freeze if not production cut to balance the market.
Horizons NYMEX Crude Oil (ETF) (TSX: HUC) could be an interesting play ahead of the crucial meeting. The ETF is up sharply in trading today, tracking gains in the oil markets. The ETF seeks investment results that endeavor to correspond to the performance of the NYMEX light sweet crude oil futures contract for the next December delivery month. Year-to-date, HUC has gained more than 4.6%. In the last one month, the ETF has returned almost 3.90%.
Saudi Arabia, which has been adamant on maintaining production, has shown some flexibility in recent weeks. This is one of the reasons why traders are expecting a firm decision at this week’s meeting in Doha. A production freeze is not likely to significantly boost prices, but it will at least provide some support to prices.
