Investors Eyeing Crude Supply Data As Oil ETFs Look For Direction
“Crude oil futures traded above and below the flatline during a jerky Tuesday trading session as observers awaited demand data illustrating last week’s inventory picture. A stronger greenback was putting pressure on the contract in the morning, capping any definitive price moves. The dollar index, which measures the buck against a basket of currencies, was adding nearly 0.2%,” Sung Moss Reports From The Street.
Moss goes on to say, “But investors will be eyeing supply figures over the next 24 hours, with the American Petroleum Industry’s weekly snapshot scheduled for release after Tuesday’s closing bell and the government’s Energy Information Administration report due Wednesday at 10:30 a.m. EDT. The coming summer driving season means more focus may be put on fuel stocks this week. A survey of Platts analysts says gasoline inventories probably fell by 1.88 million barrels last week, while distillate stocks saw a 1.25 million barrel withdrawal. But those same analysts predict crude inventories jumped by 1.67 million barrels.”
“Crude supplies are expected to show a small increase largely as a result of an expected uptick in imports of as much as 100-150,000 b/d per the EIA,” said Jim Ritterbusch, independent analyst, in a Platts release.
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“Refinery operations probably slowed last week. If expectations hold, the refinery run rate will slip 0.12% to 80.48%. The U.S. Oil Fund (USO) ETF was holding flat. The PowerShares DB Oil Fund (DBO) gained 0.1%,” Moss Reports.
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Here are some details on the two oil ETFs below:
The United States Oil Fund, LP (“USO”) is a domestic exchange traded security designed to track the movements of light, sweet crude oil (“West Texas Intermediate”). USO issues units that may be purchased and sold on the NYSE Arca. The investment objective of USO is for the changes in percentage terms of its units’ net asset value (“NAV”) to reflect the changes in percentage terms of the spot price of light, sweet crude oil delivered to Cushing, Oklahoma, as measured by the changes in the price of the futures contract for light, sweet crude oil traded on the New York Mercantile Exchange (the “NYMEX”), less USO’s expenses.
The PowerShares DB Oil Fund (Symbol: DBO) (the “Fund”) is based on the Deutsche Bank Liquid Commodity Index – Optimum Yield Oil Excess Return™ (the “Index” or “DB Crude Oil Index”) and is managed by DB Commodity Services LLC (the “Managing Owner). The Index is a rules-based index composed of futures contracts on Light Sweet Crude Oil (WTI) and is intended to reflect the performance of crude oil. Investors can buy and sell shares in the Fund at market price on the NYSE Arca, Inc. Ordinary brokerage commissions apply. Shares may only be redeemed directly from the Fund by Authorized Participants in blocks consisting of 200,000 shares.
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