Trader Shares Views On Where Oil Is Headed In Second Half Of 2009 (ETF: USO)

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July 6, 2009 9:25am ETF BASIC NEWS NYSE:USO


Crude oil is in a correction mode after a huge runnup from the March lows. Recently, Ray Carbone a Nymex energy trader shared his views with CNBC on what oil will do in second half of the year.  

“He thinks the markets are balancing, citing the sideways movements in the equities market, dollar market, and the crude market. Oil has been chopping around between $67 to $73 dollars per barrel for about a month. His forecast for the rest of 2009 includes volatility and a pullback to the $60 level and maybe lower. Considering crude oil closed the day just above the $69 level, he is expecting at least a 13% pull back,” Matt Duffield from the Examiner reports.

“Using technical analysis it is easier to see if this is a possibility. It is easier to chart the USO, so a 13% pull back would bring the USO down to $32.59. There is strong support at the $30-$33 level on the USO so Ray’s call makes sense,”  Duffield reports.

“Most investors expect crude oil to continue to move higher as the end of the recession unfolds. Traders and investors should consider buying USO when/if it hits this support level. There is very strong resistance at the $48 to $50 level on the USO, but that represents a potential 50% gain after this small pull back. It may take a while for that price objective to unfold, but a 50% gain is nothing to scoff at,”  Duffield reports.

The investment “USO” seeks to reflect the performance, less expenses, of the spot price of West Texas Intermediate (WTI) light, sweet crude oil. The fund will invest in futures contracts for WTI light, sweet crude oil, other types of crude oil, heating oil, gasoline, natural gas and other petroleum based-fuels that are traded on exchanges. It may also invest in other oil interests such as cash-settled options on oil futures contracts, forward contracts for oil, and OTC transactions that are based on the price of oil.

Full Story: Here


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