Still, some traders see oil’s recent pullback as a potential buying opportunity.
“We’ve obviously bounced 8 percent off these lows. Sentiment was extremely strong, people have been staring at the rig counts; I don’t think it’s a lagging indicator; ultimately we are in a place here, you heard the comments from OPEC — they actually think the market’s correcting itself,” said Tim Seymour, managing partner at Triogem Asset Management, in an interview with CNBC.
Elevated levels of production remain an issue for oil as well. OPEC has kept up production to pressure high-cost rivals, such as the developing U.S. shale oil producers. The International Energy Agency expects it will take several years before OPEC can effectively price out high-cost producers.
For more information on the Oil ETFs, visit our Oil category.
United States Oil Fund