“And if we look even farther back on USO’s chart, we’ll arrive at the July 2008 all-time weekly closing high of $117.39 (attained just prior to the rapid-fire implosion of the commodity bubble later that summer, and a few short months before the most chaotic days of the financial crisis). Given the significance of round-number returns from key historical price points as levels of support and/or resistance, we would be remiss not to observe that USO’s current year-to-date breakeven level roughly coincides with a 90% decline from its record weekly closing high — namely, $11.74,” notes Schaeffer’s.
On Thursday, oil prices fell to a two-week low after on reports that U.S. inventories rose and that gasoline demand may be faltering. Additionally, data indicate short interest in USO, the most heavily traded oil ETF, has recently increased.
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