For investors seeking momentum, United States Oil Fund (USO - Free Report) is probably on radar now. The fund just hit a 52-week high and is up about 58.5% from its 52-week low price of $9.00/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
USO in Focus
This fund seeks to match the performance of the spot price of West Texas Intermediate (WTI or U.S. crude). USO's benchmark is the near month crude oil futures contract traded on the NYMEX. If the near month futures contract is within two weeks of expiration, the benchmark will be the next month contract to expire. USO charges 0.76% in expense ratio (see: all the Energy ETFs here).
Why the Move?
The energy corner of the broad investing world has been an area to watch lately given the spike in oil price. U.S. crude oil gained more than 20% in the first half of 2018 buoyed by soaring demand, reducing supplies from Venezuela, Libya and Canada, threats of supply disruption from Iran as a result of sanctions, and of course the historic output cut deal between the OPEC, Russia and other producers.
More Gains Ahead?
The ETF might remain strong given a high weighted alpha of 60.50% and a mediocre 20-day volatility of 29.28%. As a result, there is definitely still some promise for investors who want to ride on this surging ETF a little further.
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