Oil EFTs See Action as Crude Nears $80 a Barrel; Pipeline Leak Slows Crude Flow

By MidnightTrader.com Staff,

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Unites States Oil Fund ( USO ) and other oil-based exchange traded funds are seeing action in today's trading after a confluence of factors lift oil prices near $80 a barrel.

Seeing action in today's market are ProShares Ultra Dow Jones-UBS Crude Oil ( UCO ) and the PowerShares DB Crude Oil Double Short ETN ( DTO ). The former is up 4.59% while the latter is down 5.68%.

Crude got a lift from better than expected economic reports out of the United States, Germany and Asia. In addition, U.S. crude inventories declined more than expected last week, according to the latest government data.

But the icing on the cake came when an oil pipeline leak outside of Chicago caused a Canadian company to shut down a critical flow of crude to and from the United States. The pipeline can carry up to 700,000 barrels of oil daily, and accounts for about 70% of the oil flows into the U.S. from the north each year, according to thestreet.com.

UCO is leveraged and seeks to deliver daily results that correspond to 200% of the daily change in the Dow Jones-UBS Crude Oil Sub-Index. DTO is also leveraged against the Deutsche Bank Liquid Commodity Index-Oil, and varies inversely. If the Index loses 2%, the fund will gain 4%.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2014 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing Commodities
Referenced Stocks: DTO , UCO , USO

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