Even though the price of oil has settled around $60, which represents a 14% gain since the beginning of the year, it hasn’t budged from this mark in the past month. Holders of shares of The United States Oil ETF (USO), however, didn’t benefit from this recovery in oil prices, as the price of USO rose by less than 1% since the beginning of the year. The contango in futures market keeps the roll decay of USO. But is the oil market starting to tighten?
The number of operating oil rigs in the U.S. continue to decline, and this development started to impact production. Up to the last few weeks, production continued to rise, albeit at a slower pace than before the sharp drop in oil prices back in October 2014.
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For more please see: “A couple of notes on the oil market”