Global Growth, U.S. Dollar Dragged Down Oil Prices

Global Growth, U.S. Dollar Drag Down Oil Prices 1

USO seeks the daily changes in percentage terms of its shares’ per share net asset value (“NAV”) to reflect the daily changes in percentage terms of the spot price of light, sweet crude oil delivered to Cushing, Oklahoma, as measured by the daily changes in the price of a specified short-term futures contract on light, sweet crude oil called the “Benchmark Oil Futures Contract.” USO seeks to achieve its investment objective by investing primarily in futures contracts for light, sweet crude oil, other types of crude oil, diesel-heating oil, gasoline, natural gas, and other petroleum-based fuels.

“You have the sanctions on Venezuela, on top of the reduced supply from Saudi Arabia,” said Olivier Jakob, oil analyst at Petromatrix. “There’s no sign of overhang in the crude oil markets.”

Counterbalancing that supply cut, however, is a supply increase by the United States, which could temper oil prices in the future.

“This points to a less pronounced rise in U.S. oil production,” said Carsten Fritsch, analyst at Commerzbank. “The oil market is more or less balanced,” Jakob added.

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