$90 a Tempting Target for Oil Bulls (USO) (OIL) (UCO)
Tweet
Share
E-mail
Despite a stronger dollar, WTI futures are trading near recent highs. Last week United States Oil Fund LP ETF (NYSE: USO) closed higher by nearly 3 percent, and WTI prices are well off monthly lows below $80 per barrel.
Sentiment for crude oil may turn positive as prices begin reflecting expectations of tighter supply in the second-half, according to a CNBC weekly survey of oil market sentiment that showed four out of ten respondents expect oil prices to rise this week. Only two out of ten expect prices to fall, while the remaining four believe prices will remain around current levels. A similar poll for the prior week showed a more bearish tone.
The price of oil is being supported by slightly lower OPEC production. Potential flare-ups regarding the situation in Iran is also helping create a floor for oil. Many traders fear being short given the potential for an instant spike in prices if negative headlines cross the wire.
On the downside, weaker global demand for oil in response to a contraction in Europe and a slow down in China is an ongoing story. A stronger U.S. dollar is also keeping a lid on a major rally in oil prices. However, with WTI prices still within striking distance of $90, if the right catalyst comes along traders might be compelled to testing resistance there. If so, bears plan to load up on shorts and longs may be caught with their hands in the cookie jar again.
For their part, bulls have a trump card and its name is Iran. But then again, this is nothing new, and it remains to be seen how well that hand will play in today’s market, with expectations for slower global growth extending well into the foreseeable future.
United States Oil ETF (NYSE: USO) is lower by 0.35 percent pre-market on Monday. WTI futures trade at $86.70.
Sentiment for crude oil may turn positive as prices begin reflecting expectations of tighter supply in the second-half, according to a CNBC weekly survey of oil market sentiment that showed four out of ten respondents expect oil prices to rise this week. Only two out of ten expect prices to fall, while the remaining four believe prices will remain around current levels. A similar poll for the prior week showed a more bearish tone.
The price of oil is being supported by slightly lower OPEC production. Potential flare-ups regarding the situation in Iran is also helping create a floor for oil. Many traders fear being short given the potential for an instant spike in prices if negative headlines cross the wire.
On the downside, weaker global demand for oil in response to a contraction in Europe and a slow down in China is an ongoing story. A stronger U.S. dollar is also keeping a lid on a major rally in oil prices. However, with WTI prices still within striking distance of $90, if the right catalyst comes along traders might be compelled to testing resistance there. If so, bears plan to load up on shorts and longs may be caught with their hands in the cookie jar again.
For their part, bulls have a trump card and its name is Iran. But then again, this is nothing new, and it remains to be seen how well that hand will play in today’s market, with expectations for slower global growth extending well into the foreseeable future.
United States Oil ETF (NYSE: USO) is lower by 0.35 percent pre-market on Monday. WTI futures trade at $86.70.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Bessent on Iran: maximum economic pressure means likely not a kinetic restart
- U.S. refiners boost crude oil intake to highest level since 2019
- Bessent to host press conference on Iran pressure plan on Monday
Create E-mail Alert Related Categories
Commodities, ETFsRelated Entities
Crude Oil, OPECSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
