The price of United States Oil (USO) slightly declined in the past few days but it still hasn’t moved much from the $34 to $35 price range. Nonetheless, this oil ETF dropped by 3.7% since the beginning of the month (up to date). Will USO resume its downward trend?
The chart above presents the normalized prices of WTI oil and USO normalized to the end of July. The current difference between these two prices is close to 1% over this time frame.
A closer look at the U.S oil futures markets reveals that currently it’s in Backwardation; this suggests the current expectations are that market estimates the price of oil to decline in the coming months.
The rest of this analysis is at Seeking Alpha
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