The largest oil exchange traded fund was down about 1% before Tuesday’s opening bell after CME Group announced higher margin requirements for oil futures.
Oil prices bounced back somewhat Monday on fresh Middle East concerns, following last week’s big sell-off. Also, rising water levels in the Mississippi River threaten to inundate some of the largest oil refineries in the U.S.
U.S. Gasoline Fund (NYSEArca: UGA) was up 6.3% on Monday, and U.S. Oil Fund (NYSEArca: USO) was up 5.1% but down 8.2% in the past two weeks.
According to Fox Business, West Texas Intermediate crude ended at $102.55 a barrel, with Brent crude for June at $115.90 a barrel, and gasoline futures gained 6%.
On Monday, nationwide average gasoline prices hovered at $3.965, reports Ronald D. White for The Los Angeles Times.
In the wake of the flood warnings near the Mississippi River, Richard Ilczyszyn, senior market strategist at Lind-Waldock in Chicago, stated that “a premium is coming in on the potential for flood damage, not just for the refineries higher up on the Mississippi, but the refineries near the mouth that were flooded by (hurricanes) Katrina and Rita.”