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PowerShares DB Crude Oil Long ETN (OLO)

- NYSEARCA
  • Tue, Mar. 17, 12:24 PM
    • A nuclear agreement with Iran could lead to the easing of sanctions that in turn could cause crude to flood onto the market and depress prices even further, WSJ reports.
    • Iran's oil minister says his country could double its exports to as much as 1M bbl/day within several months - another excuse to bet on lower prices, although negotiators say they have a long way to go before reaching a deal by a March 31 deadline.
    • But concerns that a deal would flood an oversupplied market with oil are "unduly bearish," Clearview Energy Partners managing director Kevin Book tells CNBC, thinking that a deal "probably won't bring back crude exports to their full level right away... It's probably going to be a series of gates and steps, a process where Iran has to do some things, the West will give some sanctions relief."
    • ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, UWTI, USL, DWTI, DNO, SZO, OLO, TWTI, OLEM
    | 17 Comments
  • Mon, Mar. 16, 10:40 AM
    • U.S. oil production could begin to decline by year-end, says OPEC, trying to defend its decision to maintain output in a bid to gain market share by forcing American producers to stop drilling.
    • The cartel had previously forecast U.S. oil production to not begin declining until 2018.
    • For the full year, OPEC sees U.S. production growth of 820K barrels per day vs. 2014's 1.61M barrel per day increase.
    • A bounce in WTI crude has failed and it's now taken out new six-year lows, down 3.5% on the session to $43.26 per barrel. USO -3.9%
    • ETFs: USO, OIL, UCO, SCO, BNO, UGA, DTO, DBO, UWTI, USL, DWTI, UHN, DNO, SZO, OLO, TWTI, OLEM
    | 81 Comments
  • Mon, Mar. 16, 2:10 AM
    • With the dollar hitting fresh 12-year highs and growing concerns that the U.S. might run out of oil storage, U.S. crude fell for a fifth day, dropping to its lowest intraday price since March 2009.
    • Futures lost as much as 2.8% to $43.57 a barrel, as the dollar index stayed above the key 100 level, and following the IEA's prediction on Friday that tanks in the U.S. may become full this year as drilling-rig cuts fail to slow production.
    • ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, UWTI, USL, DWTI, DNO, SZO, OLO, TWTI, OLEM
    | 35 Comments
  • Fri, Mar. 13, 3:26 PM
    • The crafty traders at the Energy Department are reportedly considering taking advantage of oil's big decline to pick up another 5M barrels for the strategic petroleum reserve, according to reports.
    • "The DOE has been pretty good at adding to the reserve when prices are low and they can help out struggling U.S. producers to boot," says Price Futures Group's Phli Flynn.
    • Oil remains near its session lows, -4.3% to $45.04.
    • ETFs: USO, OIL, UCO, SCO, BNO, UGA, DTO, DBO, UWTI, USL, DWTI, DNO, SZO, OLO, OLEM, TWTI
    | 31 Comments
  • Fri, Mar. 13, 2:14 PM
    • The U.S. oil rig count falls for the 14th straight week, down by another 56 to 866 rigs for its lowest level since March 2011, according to the latest data from Baker Hughes (NYSE:BHI).
    • There are now ~46% fewer oil rigs working since a peak of 1,609 in October, but that has not yet translated into a drop in actual production.
    • Combined, both oil and gas rigs fell by 67 to 1,125, down 686 from 1,809 at this stage a year ago; gas rigs were lower by 11 to 257.
    • U.S. crude prices already had dropped sharply - now -4.2% to just above $45/bbl - after the IEA said a global oil glut is building and U.S. oil production shows no signs of slowing.
    • ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, UWTI, USL, DWTI, DNO, SZO, OLO, TWTI, OLEM
    | 55 Comments
  • Fri, Mar. 13, 11:01 AM
    • The key force in the recent bounce in commodity markets, says Goldman Sachs, has been retailers pouring money into oil ETFs even as commodity fundamentals remain weak, especially as compared with the outlook for stocks.
    • "We believe that these inflows are generating selling opportunities in oil and copper precisely because they are at odds with commodity market fundamentals," says Goldman, noting the rapid recent fall in rig count is being offset by rising rig productivity, the backlog of wells, and the possibility of high-grading in the near future.
    • "Dissecting commodity sell-offs suggests that later is better," says the team, noting it can take months before consumption fully adjusts to lower prices (i.e., rising enough to offset the inventory build).
    • ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, ERY, DIG, JJC, BNO, UGA, DTO, DBO, DUG, IYE, UWTI, USL, FENY, DWTI, PXJ, UHN, DNO, RYE, SZO, FXN, CPER, OLO, DDG, CUPM, TWTI, OLEM
    | 30 Comments
  • Fri, Mar. 13, 6:17 AM
    • Oil prices might have stabilized only temporarily because the global oil glut is worsening and U.S. production shows no sign of slowing, the International Energy Agency announced today.
    • Putting additional downward pressure on prices, the energy watchdog said the U.S. may soon run out of spare capacity to store crude and forecast the process to last at least until the second half of 2015, when growth in U.S. oil production is expected to start abating.
    • Crude futures -0.7% to $46.74.
    • ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, UWTI, USL, DWTI, DNO, SZO, OLO, TWTI, OLEM
    | 16 Comments
  • Wed, Mar. 11, 6:55 PM
    • The latest government report showing an increase in already-record crude oil supplies is sparking speculation the market is setting up for a selloff that could take oil prices to a new cycle low.
    • "It says prices are going to remain under pressure," says Andrew Lipow, who expects oil to retest its recent low and head to $40/bbl.
    • "WTI could take another leg down," says Citigroup energy analyst Eric Lee. "If imports into the U.S. don't budge, which they won't... if exports don't rise quickly enough, which is a wild card, then producers at various locations need to shut in pipelines or run at low utilization."
    • Goldman Sachs President Gary Cohn warns that crude could fall to $30 as the industry runs out of storage space; with the winter heating oil season ending, refineries are turning to producing more gasoline for the summer driving season, he says, meaning they will not need crude oil for weeks or months.
    • $30 oil could even have an important impact on the Fed's timeline for raising interest rates; "It's hard to raise interest rates potentially when you see deflationary oil prices," Cohn says.
    • ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, UWTI, USL, DWTI, DNO, SZO, OLO, TWTI, OLEM
    | 108 Comments
  • Wed, Mar. 11, 10:31 AM
    | 20 Comments
  • Tue, Mar. 10, 1:51 PM
    • Prices for WTI crude oil (USO -2.9%) are expected to average $52.15 per barrel this year, down from the previously-forecast $55.02. Though also lowering its 2016 outlook, the EIA continues to expect a strong bounce in prices next year - now $70 vs. $71 previously.
    • Capex spending slowdown? U.S. crude oil production is expected to average 9.3M barrels per day this year, and rise to 9.5M in 2016. This country's highest-ever average production was 1970 at 9.6M barrels.
    • WTI crude is lower by 1.7% on the session to $48.35 per barrel.
    • EIA Short-Term Energy Outlook
    • ETFs: USO, OIL, UCO, SCO, BNO, UGA, DTO, DBO, UWTI, USL, DWTI, UHN, DNO, SZO, OLO, TWTI, OLEM
    | 6 Comments
  • Mon, Mar. 9, 7:46 AM
    • "The lack of a meaningful [inventory] build in the past few months leaves risk to our forecast for oil prices remaining at $40 a barrel for two quarters skewed to the upside," says Goldman, citing the weather as helping to keep more crude from coming to market.
    • Alongside the weather, violence, or sanctions-related supply disruptions pulled 885K barrels per day from the market in January and February vs. December, says Goldman. The team isn't necessarily bullish on oil though, and reminds Libyan disruptions are at a peak, normal weather in Iraq could lead to a boost in exports, and Russia, Brazil, Saudi Arabia, and the U.S. could continue to lift production. "Our expectation going forward is therefore for the global crude inventory build to resume."
    • Crude is little-changed in morning action, at $49.81 per barrel.
    • ETFs: USO, OIL, UCO, SCO, BNO, UGA, DTO, DBO, UWTI, USL, DWTI, UHN, DNO, SZO, OLO, TWTI, OLEM
    | 20 Comments
  • Fri, Mar. 6, 5:57 PM
    • Oil drillers expecting prices to rebound have come up with an alternative to storing their crude in tanks: They’re keeping it in the ground, as drillers who have spent millions boring holes through petroleum-rich shale are just waiting for prices to go up before actually turning on the spigot.
    • The backlog of unfracked wells is one reason U.S. crude output is poised to climb even as companies have idled more than a third of the rigs that were drilling for oil in October; Continental Resources' (NYSE:CLR) Harold Hamm says ~85% of U.S. wells aren’t being completed right now.
    • Examples: Anadarko Petroleum (NYSE:APC) says it expects to have as many as 440 uncompleted wells by year's end, EOG started the year with ~200 uncompleted wells and plans to let that inventory build through H1, and Canadian Natural Resources (NYSE:CNQ) says it has 161 uncompleted wells.
    • Initial production from a new well typically is 750-1,000 bbl/day, meaning the "fracklog" could represent as much as 3M bbl/day of new output, at least at the outset - a major reason an oil price recovery will prove to be an extended process, analysts say.
    • ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, UWTI, USL, DWTI, DNO, SZO, OLO, TWTI, OLEM
    • Earlier: Oil glut's latest dilemma: where to store it all
    | 60 Comments
  • Fri, Mar. 6, 1:19 PM
    • The U.S. rig count declined by 75 this week to 1,192, picking up the pace from last week's 43 rigs taken out of service, the 13th consecutive week of total decline and the lowest reading since the week ending Dec. 31, 2009, according to the latest survey from Baker Hughes (NYSE:BHI).
    • Drillers idled 64 oil rigs to 922, the lowest number of oil rigs in use since April 2011 and down 43% since October.
    • Per drilling region, the biggest decline came from Texas' Permian shale basin, where 22 rigs were shut down, while 8 Eagle Ford rigs were shut.
    • ETFs: USO, OIL, UCO, SCO, BNO, UGA, DTO, DBO, UWTI, USL, DWTI, UHN, DNO, SZO, OLO, TWTI, OLEM
    | 26 Comments
  • Thu, Mar. 5, 7:23 PM
    • U.S. inventories are at their highest levels in at least 80 years, and the U.S. is running out of places to store it, prompting some analysts to predict already depressed prices could spiral even lower.
    • When storage is full, there is pressure on those holding oil in storage to "dump that inventory,” says the CEO of energy consulting firm Perry Management, who believes the space shortage could cause prices to drop to as low as $30/bbl.
    • U.S. oil production rose for the fourth consecutive week to a rate of 9.3M bbl/day, even as drilling rigs are being idled at a rapid clip; U.S. inventories also rose, for the eighth straight week, jumping 2.4% to 444M barrels, the U.S. Energy Information Administration reports.
    • Producers are pumping nearly 1.5M bbl/day more crude than the world needs, due to a combination of slowing demand and rising production in the U.S., meaning oil put in storage today could be there for years; should the glut worsen, more producers could be forced to shut their wells, effectively storing the oil in the ground.
    • Storage operators at Cushing, Okla., including Plains All American (NYSE:PAA) and Phillips 66 (NYSE:PSX), said recently they expect the tanks there to hit capacity - currently they are about two-thirds full.
    • ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, UWTI, USL, DWTI, DNO, SZO, OLO, TWTI, OLEM
    | 57 Comments
  • Thu, Mar. 5, 5:45 AM
    • Expect continued consolidation, volatile at times, with a tendency toward higher oil prices, Mohamed El-Erian says in an op-ed this morning.
    • There will be no quick return to the $100 level.
    • Low-cost producers of oil and energy products will expand their market share.
    • All above bets are off the table if there's a geopolitical shock.
    • ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, UWTI, USL, DWTI, DNO, SZO, OLO, OLEM
    | 10 Comments
  • Wed, Mar. 4, 10:31 AM
    | 46 Comments
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OLO Description
All of the PowerShares DB Crude Oil ETNs are based on a total return version of the Deutsche Bank Liquid Commodity Index-Oil (the "Index") which is designed to reflect the performance of certain crude oil futures contracts plus the returns from investing in 3 month United States Treasury bills. The Long ETN is based on the Optimum Yield™ version of the Index and the Short and Double Short ETNs are based on the standard version of the Index. The Optimum Yield™ version of the index attempts to minimize the negative effects of contango and maximize the positive effects of backwardation by applying flexible roll rules to pick a new futures contract when a contract expires. The standard version of the index, which does not attempt to minimize the negative effects of contango and maximize the positive effects of backwardation, uses static roll rules that dictate that an expiring futures contract must be replaced with a contract having a pre-defined expiration date.
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