“The so-called put skew on December Brent and West Texas Intermediate options — the premium traders will pay for insurance that prices will fall rather than rise — has narrowed more than 30 percent since early July. The skew on second-month WTI contracts has fallen by almost half. That pullback in bearish sentiment fits in with the view that the worst of the oil rout is over and prices will recover as a global surplus continues to ease,” report Mark Shenk and Grant Smith for Bloomberg.
SEE MORE: A Very Bullish Call for Oil ETFs
Recent flows data suggest buyers have been stepping into USO, indicating that they believe oil’s current bear market is not one that will be long-lasting.
“But there is no guarantee that the price slide will reverse. In early trading on Thursday, WTI and Brent were back down. “Maybe the surprise drawdown in gasoline inventories helped future prices remain stable but that does not change the fact: the U.S. is flooded with oil,” Tamas Varga, lead oil analyst PVM Oil Associates, told Reuters.
For more information on the Oil ETFs, visit our Oil category.
United States Oil Fund
