United States Oil Fund (USO)

Shares of United States Oil Fund Stock (USO) dropped by 5.43% from $79.93 to $75.59 in the trading on Wednesday October 4, 2023. The reasons why stock USO is down today includes:

• Sharp oil price decline: Oil prices experienced a substantial decline of more than 5% on October 4, marking the most significant single-day drop since March 2020. Several factors contributed to this downturn, notably concerns surrounding a potential global economic recession, the upward trajectory of interest rates, and the strengthening of the US dollar. USO is a leveraged ETF, meaning that it uses debt to amplify its returns. When oil prices fall, USO's losses are magnified.
• Decreasing demand: According to the U.S. Energy Information Administration's (EIA) report on Wednesday, last week's finished motor gasoline supplied, a demand indicator, hit a yearly low at around 8 million bpd. Severe weather, including flooding in New York and post-tropical storm Ophelia, likely contributed to this drop. JP Morgan's commodity analysts noted that U.S. gasoline consumption is currently at its lowest point in 22 years. Additionally, a 30% increase in fuel prices during the third quarter of the year led to an unexpected 223,000 bpd decline in demand, defying typical seasonal patterns. The decline in demand for oil and gas would hurt the profits of USO.