The United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, and the United States Brent Oil Fund (NYSEArca: BNO), which tracks Brent crude oil futures, have recently been solid performers among commodities exchange traded products.
For example, USO is up more than 8% this month. BNO and USO have been lifted by the production cut announced earlier this month by the Organization of Petroleum Exporting Countries (OPEC).
OPEC plans to diminish output to a range of 32.5 to 33.0 million barrels per day from its current estimated output of 33.24 million barrels per day. While Saudi Arabia, OPEC’s biggest producer, has agreed to reduce output, Iran, Libya and Nigeria might not follow suit.
However, data suggest some traders are betting oil pulls back over the near-term.
“Money managers trimmed bets on falling West Texas Intermediate crude prices to the lowest level since August 2014 as the Organization of Petroleum Exporting Countries and other crude-exporters prepare to start curbing output in January,” reports Mark Shenk for Bloomberg. “Oil market volatility dropped to the lowest level in more than two years on Dec. 20 and futures settled at a 17-month high on Friday.”