Positive on United States Oil Fund LP (ETF) (NYSEARCA:USO)

  • OPEC will not cut oil production
  • Global Supply will slowly fall
  • Oil Prices will continue to rise
  • Expect a range between $55 - $90
  • The US will determine global supply perceptions

Our outlook on United States Oil Fund LP (ETF) (NYSEARCA:USO) is positive.

Stock Traders Daily remains bullish on Oil prices and expects Oil Prices to continue to increase over the next 12 months.  However, the 'war' being waged between OPEC and the shale producers in the United States will not go away.  When Oil prices reach relative peaks, our estimates suggest near $90, frackers will maximize they production, and when Oil Prices fall to relative lows, $55 is our estimated trough level going forward, the shale producers domestically will curtail production efforts. 

That suggests that the US could very well be the determining factor in Oil prices going forward.

We do not expect OPEC to change output in an effort to control prices much in the future unless that is supported in some way by global efforts which must include the United States.  In our opinion, that is a very unlikely scenario given the free market environment that the US portends. 

If the free market is left to work properly on a domestic basis, which is what we expect, Oil price oscillations between $55 and $90 are likely for the next handful of years.