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.
Aggressive traders can consider the United States 3X Oil Fund (NYSEArca: USOU) and the United States 3X Short Oil Fund (NYSEArca: USOD), introduced by United States Commodity Funds, USO issuer.
Potential traders should keep in mind that these funds will try to seek their leveraged/inverse return for a single day and do not seek to achieve their stated investment objective over a period greater than one day.
“Hedge funds increased their WTI net-long position — the difference between bets on a price increase and wagers on a drop — by 11 percent to 238,501 futures and options over the week ended July 25, data from the U.S. Commodity Futures Trading Commission showed. Shorts slipped by 22 percent and stood at less than half their level at the end of June. Longs fell 0.2 percent,” according to Bloomberg.
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