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.
“Redler turned to the charts to make his case for a bigger rally for crude. While oil has been in a “downtrend” this year, Redler stresses that the commodity has still stayed above “support” and has recently bounced back to its 50-day moving average. As a result, Redler believes that if oil can still hold $45, there could be room to run up to $51, back to its highs in May,” according to CNBC.
USO appears to be perking up just as some traders are losing patience with the ETF. Since the start of the third quarter, the ETF has lost nearly $471 million in assets.
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