Have Traders Got Bullish Too Quickly on Oil ETFs?

On Demand Webcast: Why Commodity ETFs Should Be Part of Your Diversified Portfolio

While the Organization of Petroleum Exporting Countries are skeptical that demand growth can put a dent into the ongoing supply glut, the oil cartel has made steps to cut down supply to bolster prices. OPEC has already promised to curb production by 1.2 million barrels per day between January this year and March 2018.

“And then, yesterday, bulls were dealt a blow. Three separate surveys, from Reuters, Bloomberg, and Petro-Logistics, suggested OPEC’s July output had grown. The Reuters poll was the most optimistic, pegging the increase at 90,000 bpd. Petro-Logistics estimated it at 145,000 bpd, and Bloomberg’s was the most pessimistic, seeing the increase at 210,000 bpd,” according to OilPrice.com.

Although U.S. shale producers have recently started paring output, it is expected that oil inventories here recently ticked higher, adding to a confounding situation for oil bulls. Bottom line: Production may not be falling rapidly enough to suit some that are traders that are long oil futures.

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