“The USO oil ETF remains firmly in bullish territory. The pullback is thus far run-of-the-mill and has yet to shatter any significant support levels. A retracement to the 20-day moving average is as normal as it gets leaving little for oil bulls to get worked up about,” according to InvestorPlace.
Oil companies are reducing costs by laying off thousands of workers and halted many new projects.
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Large integrated oil companies are expected to hold up better than drilling stocks as these giants have both upstream exploration and production, along with downstream refining operations.
“Lending further weight behind a bullish forecast for USO is the momentum confirmation accompanying its last swing high. The new peak in USO at $11.50 was accompanied by a new high being carved out by the Relative Strength Index, which suggests the momentum of oil’s budding uptrend remains strong,” adds InvestorPlace.