“Saudi Arabia has a very unfair advantage over their OPEC buddies with a $9 average production cost so it hurts them a lot less to cut production because their margins are so massive for each barrel sold.  They wanted to get the other OPEC producers to agree to cuts but many of those countries are having trouble making their budgets,” notes Phil’s Stock World.

Saudia Arabia is the largest OPEC producer and is widely viewed as the kingpin of the cartel. To this point in the third quarter, investors have yanked over $1 billion from USO.

Between 2014 and 2016, global oil companies reduced spending by a whopping 40%, efforts that included significant layoffs and withdrawals from projects seen as too expensive or unlikely to bear near-term profits.

For more news on oil ETFs, visit our oil category.

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