ETF Update: Exit The OOO Crude Oil Trade

Despite a larger-than-expected fall in US Crude Oil inventories, the price of West Texas intermediate (WTI) Crude Oil failed to hold the recent gains above the $45.50 level and looks to be rolling over.

The US EIA reported that crude oil in storage fell by 6.3 million barrels versus an expected fall of 2.3 million barrels, which pushed WTI up to an intraday high of $46.25. 

However, news that OPEC producers have not agreed to renew their production cuts has prompted investors to believe that Crude Oil supplies are not going to balance in the near term.

We suggested buying the BetaShare Oil ETF with the symbol, OOO in the $12.35 area on June 22nd. We now suggest closing that position in the $12.75 area and looking for another opportunity to enter the market on a test of the $41.00 level.

BetsShare OOO  





ETF Update: Buy OOO For A Bounce In Crude Oil

Over the last 4 weeks, the price of WTI Crude Oil has dropped over 20% from $52.00 to just under $42.00.

Increased shale production, more supply from Non-Opec nations and the unwinding of large speculative long positions have all factored into the recent price slide.

However, from a technical perspective, we consider the price risks asymmetrically skewed to the upside from current levels. The likelihood of some sort of weather or politically-base supply disruption should also be taken into account.

For investors looking for a pure-play in a rebound in Crude Oil prices, we suggest looking at the BetaShare ETF with the symbol: OOO. 

Shares of OOO are currently trading at $12.20.

On June 8th, with WTI trading at $46.00 per barrel, shares of OOO traded as high as $14.30. We believe this is a reasonable trade dynamic for a a short-term rebound in the WTI Crude Oil price.

BetaShare ETF: OOO


ETF Watch: Buy OOO For Mean Reversion Trade In Crude Oil

Over the last 10 trading sessions, WTI Crude Oil has dropped over 13% from $52.00 to last nights low of $45.20.

Technically, we see good support near the $43.75 area, which was the reversal low posted on May 5th.

Fundamentally, increased political tensions between OPEC members Qatar, Saudi Arabia and Iran could escalate into military engagement with some associated levels of supply disruption in the near-term.

As such, we have been looking to buy the dip in some of the local energy names like Origin Energy and  Oil Search. (The ALGO engine gave a buy signal on OSH yesterday)

Further, we have also suggested that investors looking for a mean reversion higher in Crude oil prices can buy the BetaShare Oil ETF with the symbol OOO.

OOO traded as high as $8.10 just a week ago and has now in the low $7.00 area.

BetaShare Crude Oil ETF


Origin Energy

Oil Search


ETF Watch – OOO (Betashares Oil)

We continue to track the Betashares oil ETF OOO.AXW

Oil prices have rallied from the recent low after this week’s largest inventory drop of 2017. EIA data has revealed U.S. crude stocks fell by 5.2M barrels. In addition, OPEC supply cuts have been agreed to by Iraq and Algeria joined Saudi Arabia.

Concerns regarding the abundant added supply of US shale oil will keep a lid on any meaningful rally, but we may see a bounce from the recent low. Investors should run stop losses under the trend low on both ETF and individual stock names.

Our best performing energy trade has been the long ORG position. However, due to the extended price rally since the Algo Engine buy signal, we’re now inclined to take profit in ORG and consider the OOO.AXW ETF as a replacement.

Chart – Betahsares Oil ETF



Crude Oil Dips Below $48.00

West Texas Intermediate Crude Oil prices dropped below $48.00 for the first time in over a month as rising output in the USA, Canada and Libya have more than offset the production cuts agreed to by OPEC members last November.

At one point in the NY session Crude prices were over 3% lower to $47.40 before weekly US inventory data lifted the market back over $47.90.

we have been following the BetaShare Oil ETF called OOO. It has traded in a wide range between $17.50 and $13.80 this year as crude prices have fluctuated.