Oil prices rose 2.3% Wednesday, continuing an ascent that has seen crude make consecutive 2016 highs while boosting the United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, to a one-month gain of nearly 16.4%.
But with oil futures on a torrid pace in recent weeks, more and more market observers view crude as vulnerable to a near-term pullback. Some of the world’s largest producers continue to pump crude at record levels, with the Organization of Petroleum Exporting Countries maintaining Saudi Arabia’s strategy of squeezing out high-cost competitors.
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Some of the world’s largest producers continue to pump crude at record levels, with the Organization of Petroleum Exporting Countries maintaining Saudi Arabia’s strategy of squeezing out high-cost competitors.
Saudi Arabia previously said it would join a production freeze deal if Iran agreed to curb output. However, Tehran has maintained that it should be allowed to raise production to previous levels before the introduction of Western sanctions over Iran’s nuclear program, instead arguing for individual-country production quotas.[related_stories]
John Kilduff, founding partner of Again Capital said in a CNBC interview “he believes there are several bearish factors ahead. For one, the Federal Reserve is going to hike interest rates “soon.” Once that happens, he expects the dollar to rally, which could drag down oil prices,” reports the network.