Notice of Index Modifications: Ferrari ETPs

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Author

Violeta Todorova

Date

Oil Prices Set to Rise Further

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  • Oil surges to a five month high
  • OPEC+ cuts and geopolitical tensions support prices

Over the past month, crude oil prices experienced a strong surge, with brent crude futures reaching $87.70 per barrel for the first time since October 2023. The remarkable rally which started in December 2023 has been influenced by a number of factors, ranging from geopolitical tensions, the extension of OPEC+ output cuts, the tightening of physical market, and increased demand from the largest oil consuming countries.

Geopolitical tensions and supply constraints

The recent escalation of geo-political tensions, particularly the Ukrainian drone attacks on Russian oil infrastructure, the continued unrest in the Middle East, and extended OPEC+ supply cuts have fuelled apprehensions over potential disruptions to global oil supplies and have been supporting crude prices. While these tensions have not yet led to significant supply disruptions, they have contributed to market uncertainty. Despite headwind winds such as a robust U.S. production and a challenging economic outlook for the biggest oil consumer – China, crude prices have been gradually rising in the first quarter of 2024.

OPEC+ production cuts and tightening of physical markets

The decision by OPEC+ members to extend production cuts until June 2024, with indications of further extensions, has played a pivotal role in tightening physical markets and supporting oil prices. The move signals a commitment to balancing supply and demand, contributing to sustained tightness in physical markets throughout the second quarter of 2024.

Improving economic outlook and rising demand

The upwardly revised outlooks for the global economy, coupled with improving demand projections, have increased optimism among crude traders. Increased mobility in major oil-consuming regions, such as China and Europe, alongside robust household consumption in India, has driven up oil demand. Despite concerns over economic growth in some regions, overall demand remains resilient, contributing to a net supply deficit in physical markets.

Projection for crude oil demand and prices

The International Energy Agency (IEA) projects a modest uptick in crude oil demand by 1.1 mbpd in 2024, compared to a 1.9 mbpd growth in 2023. The growth is primarily driven by emerging markets like India and China. The outlook for crude prices remains broadly balanced in 2024, with the possibility of brent crude futures rising to $90.00 per barrel in the short term. Escalating geopolitical tensions and the ongoing OPEC+ output cuts are likely to continue to exert upward pressure on prices.

A graph of stock market

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Source: TradingView

Technical analysis

Oil has been trading sideways from the onset of 2024, with the price of brent fluctuating within the boundaries of a bullish ascending triangle. Last week’s price action decisively broke above its key resistance of $84.80 per barrel, showing that a new uptrend has started and suggesting that higher price levels are likely to unfold in the short-term. The potential upside price target based on the breakout is in the range between $90.00 and $95.00 per barrel.

Conclusion

The surge in crude oil prices over the past three months reflects a complex interplay of geopolitical, supply-demand, and economic factors. Geo-political uncertainty and extended supply cuts by OPEC+ have buoyed prices, despite the challenging economic outlook in China and the robust non-OPEC supply growth.

Professional investors looking to invest in crude oil may consider Leverage Shares Brent Oil ETC or Leverage Shares WTI Oil ETC . For magnified exposure, investors may consider Leverage Shares +2x Long WTI Oil or Leverage Shares -2x Short WTI Oil ETPs.

Footnotes:
  1. International Energy Agency
Websim is the retail division of Intermonte, the primary intermediary of the Italian stock exchange for institutional investors. Leverage Shares often features in its speculative analysis based on macros/fundamentals. However, the information is published in Italian. To provide better information for our non-Italian investors, we bring to you a quick translation of the analysis they present to Italian retail investors. To ensure rapid delivery, text in the charts will not be translated. The views expressed here are of Websim. Leverage Shares in no way endorses these views. If you are unsure about the suitability of an investment, please seek financial advice. View the original at

Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.

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Terms and Conditions

Notice

If you are not classified as an institutional investor, you will be categorised as a private/retail investor. At this time, we cannot send communications directly to private/retail investors. You are welcome to view the contents of this website.

If you are an ‘Institutional investor’, you affirm either that you are a Per Se Professional Client, or that you wish to be treated as an Eligible Counterparty Client, both as defined under the Markets in Financial Instruments Directive, or an equivalent in a jurisdiction outside the European Economic Area.

Risk Warnings

The value of an investment in ETPs may go down as well as up and past performance is not a reliable indicator of future performance. Trading in ETPs may not be suitable for all types of investor as they carry a high degree of risk. You may lose all of your initial investment. Only speculate with money you can afford to lose. Changes in exchange rates may also cause your investment to go up or down in value. Tax laws may be subject to change. Please ensure that you fully understand the risks involved. If in any doubt, please seek independent financial advice. Investors should refer to the section entitled “Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in the securities offered by the Issuer.

This website is provided for your general information only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any investment.

Nothing on this website is advice on the merits of any product or investment, nothing constitutes investment, legal, tax or any other advice nor is it to be relied on in making an investment decision. Prospective investors should obtain independent investment advice and inform themselves as to applicable legal requirements, exchange control regulations and taxes in their jurisdiction.

This website complies with the regulatory requirements of the United Kingdom. There may be laws in your country of nationality or residence or in the country from which you access this website which restrict the extent to which the website may be made available to you.

United States Visitors

The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions.

Persons accessing this website in the European Economic Area

Access to this site is restricted to Non-U.S. Persons outside the United States within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”). Each person accessing this site, by so doing, acknowledges that: (1) it is not a U.S. person (within the meaning of Regulation S under the Securities Act) and is located outside the U.S. (within the meaning of Regulation S under the Securities Act); and (2) any securities described herein (A) have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction and (B) may not be offered, sold, pledged or otherwise transferred except to persons outside the U.S. in accordance with Regulation S under the Securities Act pursuant to the terms of such securities. None of the funds on this website are registered under the United States Investment Advisers Act of 1940, as amended (the “Advisers Act”).

Exclusion of Liability

Certain documents made available on the website have been prepared and issued by persons other than Leverage Shares Management Company. This includes any Prospectus document. Leverage Shares Management Company is not responsible in any way for the content of any such document. Except in those cases, the information on the website has been given in good faith and every effort has been made to ensure its accuracy. Nevertheless, Leverage Shares Management Company shall not be responsible for loss occasioned as a result of reliance placed on any part of the website and it makes no guarantee as to the accuracy of any information or content on the website. The description of any ETP Security referred to in this website is a general one. The terms and conditions applicable to investors will be set out in the Prospectus, available on the website and should be read prior to making any investment.

Leverage Investment

Leverage Shares exchange-traded products (ETPs) provide leveraged exposure and are only suitable for experienced investors with knowledge of the risks and potential benefits of leveraged investment strategies.

Cookies

Leverage Shares Management Company may collect data about your computer, including, where available, your IP address, operating system and browser type, for system administration and other similar purposes (click here for more information). These are statistical data about users’ browsing actions and patterns, and they do not identify any individual user of the website. This is achieved by the use of cookies. A cookie is a small file of letters and numbers that is put on your computer if you agree to accept it. By clicking ‘I agree’ below, you are consenting to the use of cookies as described here. These cookies allow you to be distinguished from other users of the website, which helps Leverage Shares Company provide you with a better experience when you browse the website and also allows the website to be improved from time to time. Please note that you can adjust your browser settings to delete or block cookies, but you may not be able to access parts of our website without them.

This website is maintained by Leverage Shares Management Company, which is a limited liability company and is incorporated in Ireland with registered offices at 2 Grand Canal Square, Grand Canal Harbour, Dublin 2.

By clicking you agree to the Terms and Conditions displayed.