Global supply of oil is still strong, but there are risks to demand growth and low prices could be required throughout 2016 bring supply and demand into balance by year-end, according to Goldman Sachs, reports Chris Dieterich for Barron’s.
However, there are reasons for investors to be cautious with volatile energy ETFs. Moreover, if oil prices falls to new lows and the shale industry is unable to turn a profit, the highly leveraged industry may find it harder to repay debt obligations.
“In the bigger picture, a corrective move higher in crude oil prices and USO could last several months or even a year. At this point, the most likely scenario is that the move should consist of three waves, and the expected wave (a) drawn on the weekly chart might be the first of those,” according to See It Market.
United States Oil Fund
