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Oil ETF (USO) Hits New 52-Week High
For investors seeking momentum, United States Oil Fund (USO - Free Report) is probably on radar. The fund just hit a 52-week high and is up 27.7% from its 52-week low price of $66.02/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:
USO in Focus
United States Oil Fund seeks an average daily percentage change in USO’s net asset value for any period of 30 successive valuation days within plus/minus 10% of the average daily percentage change in the price of the Benchmark Oil Futures Contract over the same period. United States Oil Fund has an expense ratio of 0.70% (see: all the Energy ETFs here).
Why the Move?
The oil segment of the broad commodity market has been an area to watch lately, given soaring oil prices. A combination of easing U.S. inflation, colder weather, new sanctions on Russian oil and falling U.S. stockpiles are pushing oil prices higher. The speculation that the Trump administration may tighten sanctions against Iran in the coming months is adding to the strength. Further, the oil futures market entered a state of backwardation, which signals that the oil market is tightening and demand is robust. A market in backwardation is likely to persist, at least in the near term, acting as the biggest catalyst for oil.
More Gains Ahead?
It seems that USO might remain strong, given a higher weighted alpha of 24.71 and a low 20-day volatility of 21.86%. As a result, there is definitely still some promise for risk-aggressive investors who want to ride on this surging ETF.