It’s hard to feel bad about the notion of falling oil prices. But with the United States Oil Fund ETF (USO) slipping in today’s trading and the reason why the fund is in decline, there are not only a few reasons to feel bad, but at least a few reasons to feel good. The first big reason behind that fall—and a reason to feel a little more optimistic about life in general—is that the nuclear talks between the U.S. and Iran are actually shaping up reasonably well.
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There’s even talk that Iran may be willing to go back to the Obama-era deal. That would lift some of the sanctions on Iran’s crude oil and bring it back into the market, a move that would work against OPEC’s operations cut and get the market going a little more again. The White House issued a statement that called such reports false, though, so the exact state of the U.S/Iran talks is as yet unclear.
However, that’s not the only thing driving oil prices right now. Demand forecasts for this summer have proven weaker than normal. A Reuters report noted that U.S crude stockpiles were slightly down, but gasoline inventories were slightly up. That combination suggests a potential decline in demand as peak summer travel season kicks in.
A look at the last five days in trading for the United States Oil Fund ETF, meanwhile, shows us just how volatile oil prices can be. Just before noon today, the price plunged on the ETF’s shares, dropping $2 in the course of an hour. However, over the course of the next two hours, prices recovered to where they were just earlier this morning.
