A day after surging more than 5%, helping the United States Oil Fund (NYSEArca: USO) to its best one-day performance since February, West Texas Intermediate futures are higher by another 2% today.
With that, USO, which tracks front month WTI contracts, has surged 11.6% in just the past week, giving investors reason to believe that oil’s darkest days are behind it. Some of the most savagely repudiated equity-based energy exchange traded funds are notably participating in oil’s recent rally. For example, the Market Vectors Oil Service ETF (NYSEArca: OIH) is up 7.2% in the past week.
Few equity-based energy ETFs are as intimately tied to fluctuations in oil prices as are oil services funds. That much was on display in 2014 when as USO plunged 42.4%, OIH tumbled 23.5%. That slide prompted investors to yank more than $276 million from OIH. [Oil Services ETFs Become Laggards]
A technical look at OIH indicates the $1.2 billion ETF may have more upside to come as it works its way through the bottoming process.
OIH “is now backin the middle of its 2015 range, but the bottoming process since mid-December has a more constructive look. A little over two weeks ago the index retested January’s multi-week lows just above $31.50. After three straight sessions of tight action near this level, the OIH ramped up 3.3% on March 18,” writes Gary Morrow for the TheStreet.com.