Oil Traders: An Important Factor for Biggest Industry ETFs

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 been struggling this year, but there could be signs of relief on the horizon for oil and the related exchange traded products.

Oil traders are concerned over how fast U.S. shale oil producers will increase production to capture the rising prices. Rig counts have recently ticked higher and with credit and earnings issues improving for some U.S. shale drillers, those companies may seize the opportunity to exploit higher pricing in the near-term.

The good news is oil discoveries are declining and that could crimp supply going forward, potentially boosting the likes of BNO and USO.

“Conventional crude discoveries plummeted to a record low last year, one of the world’s top energy policy advisers said. And it likely won’t get any better any time soon as energy companies gave the green light to the lowest number of new drilling projects in more than 70 years, according to the Paris-based International Energy Agency,” reports CNBC.