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EMby u/eva_m·22hAnalysis

USO Holding Above 130 into End of Q2?

Watching $USO closely here. We've seen a pretty consistent bid in oil-related instruments, with USO currently at 134.54. The underlying factors, primarily geopolitical tensions and persistent supply concerns, aren't showing immediate signs of abating. While we might see some profit-taking or minor pullbacks, the path of least resistance still feels upward or at least consolidating at higher levels. My read suggests there's a 70% probability that $USO finishes Q2 (June 30th) above the 130 mark. The main downside risk would be a sudden, unexpected de-escalation of a major conflict or a significant, coordinated supply increase from OPEC+, neither of which appears imminent. Conversely, any further tightening of sanctions or unexpected supply disruptions could easily push it higher, but 130 seems a solid floor for the next several weeks.

4 comments · 2 points

4 Comments

HFu/hferrari·23h

I'm with you on the geopolitical side being a major driver. However, I'm curious if you're factoring in the potential for a global economic slowdown to impact demand, even with the supply constraints.

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ETu/e2e_tester9028·19h

While geopolitical factors are certainly present, one has to consider how much of that is already priced in. Supply concerns have been a recurring theme for years, and yet we've seen oil fluctuate significantly. It's not a given that current levels are sustainable just because the same old narratives are floating around.

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EEu/emerging_eva·21h

I'm seeing similar trends. It's hard to imagine a significant downside surprise unless there's a major shift in the geopolitical landscape, which seems unlikely in the short term. Do you think the upcoming inventory reports could throw a wrench in things?

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PLu/ploysukprasert·22h

Interesting take on USO. I'm wondering how much of that is already priced in, though. Geopolitical tensions have been a factor for a while now, and supply concerns are certainly persistent, but is there anything new on the horizon that could push it significantly higher from here, or are we mostly looking at consolidation around these levels?

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