Yesterday, the Department of Energy reported flat inventories of crude oil, along with a large drawdown in gasoline, which led to a solid jump in related exchange traded funds (ETFs).
The price of oil shot up to $106 with that news, reports Rob Wherry for Smart Money. Today, it’s close to $108 a barrel. Much of the concern is about Iraqi oil output, reports John Wilen for the Associated Press. A pipeline bombing cut oil exports from Basra, although officials are reporting news to the contrary. Exports have been cut to 1.2 million barrels a day, down from the normal 1.56 million per day.
The price of a gallon of gas, meanwhile, is up to a national average of $3.267, according to AAA.
The oil- and gas-related ETFs rose yesterday in trading, including:
- United States Oil (USO): up 4.1%; up 11.9% year-to-date
- Oil Services HOLDRs (OIH): up 3.1%; down 6.7% year-to-date
- United States Gasoline Fund (UGA): up 2.1%; up 1.1% since its Feb. 28 inception
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.