United States Oil Fund LP (ETF)(NYSEARCA:USO) Plunged Heavily On Friday


Amid swift fall in Crude oil futures, United States Oil Fund LP (ETF)(NYSEARCA:USO) hit the rock bottom on Friday trading session. As per the reports, the plunge was driven by a massive 3.09% reduction in West Texas Intermediate – US benchmark for crude oil and 1.32% reduction Brent Crude – global benchmark for crude oil.

Insights of The Matter

The United States Oil Fund LP follows WTI and Brent Crude. Due to a collective adverse performance of oil futures at both these benchmarks, USO also fell down by 2.69% on Friday. Even after its diversified fund structure, United States Oil Fund couldn’t manage to get rid of the adverse market situation. Apart from it, United States Brent Oil Fund, LP was also down 2.48 percent.

What Triggered This Sharp Fall?

The market experts are blaming the rising dollar value behind this sharp decline in oil future prices. During the intraday trading, USD rose as much as 0.3% compared to ten other currencies and touched its highest level in the last 12 years.

As the dollar gets strong, commodities such as Gold and WTI that is usually denominated in dollar start losing worth as they become more expensive for investors holding other currencies. Although the government has been trying different measures over the past few months to control the rising dollar value, nothing has worked out yet.

Commodities such as crude are inversely proportional to the interest rate. What happened on Friday also validated the same concept once again.

Insights On USO

The United States Oil Fund LP or United States Oil Fund LP (ETF)(NYSEARCA:USO) is an exchange traded fund, which has been designed in such a way that it can easily track the daily price movements in WTI sweet and light crude oil. Shares issued by USO can be traded on NYSE marketplace. It’s recommended to those who are well-familiar with future options and have a special interest in crude oil field.