United States Oil (USO) Rally Fizzles

June 18, 2012 7:49 AM EDT
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United States Oil (NYSE: USO) is expected to open lower as markets shrug off positive results in Greece's elections. The spot price of WTI futures traded higher last week, rising from a low of $81 to reach a high slightly over $85 in Asia on Monday, but the rally died out relatively quickly as traders booked early profits.

Nuclear talks with Iran are scheduled for Monday, but unless a bombshell drops, the market reaction is likely to be muted, as most expect the talks to continue to muddle on. Strains in Iranian relations are being overshadowed by high production levels out of OPEC. Last week OPEC agreed to keep their production target unchanged at 30 million barrels per day. The FOMC will be meeting Wednesday and talk of QE3 has been hot and heavy due to the escalating crisis in Europe. Fed Chairman Ben Bernanke could indicate that more help is on the way, although it is more likely the Fed will just continue with its current programs and acknowledge that they strand ready with additional easing should it become necessary.

WTI futures are trading at 83.60 currently, and Brent is at trading just under $97. United States Oil (NYSE: USO) last traded at 31.63.

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