Why Is United States Oil Fund (USO) ETF Up +3.45% Today?
Key Takeaways
- The USO ETF climbed +3.45% (+$4.97) to roughly $148.88 in early trading Thursday, from a prior close of $143.91.
- The primary catalyst was a resurgence of Middle East supply fears, including reports that the U.S. could launch new strikes on Iran and a wave of tanker attacks near the Strait of Hormuz.
- Hurricane Isaias added a second supply shock, forcing the shut-in of about a quarter of Gulf of Mexico crude output.
- Tighter-than-expected U.S. crude inventories reinforced the rally, with stockpiles falling 3.2 million barrels.
- The fund tracks near-month West Texas Intermediate (WTI) futures, making it a direct proxy for crude oil price swings.
- Investors are watching the storm's path, weekly inventory data, U.S.–Iran diplomacy, and upcoming inflation data.
Opening Summary
The United States Oil Fund (USO) surged in Thursday's session, rising 3.45% to approximately $148.88 after settling at $143.91 the prior day. The fund, which seeks to track the daily price movements of front-month WTI crude oil futures, moved in lockstep with a sharp rebound in crude prices. Brent climbed back above $105 per barrel while WTI pushed past $92, as markets repriced the risk of physical supply disruptions across two fronts: renewed Middle East hostilities and a hurricane threatening U.S. Gulf of Mexico production.
What Drove the ETF Move Today
Middle East Supply Fears Reintensify
The biggest driver was a fresh escalation in geopolitical risk. Reports indicated the Pentagon was preparing options for a possible resumption of major military operations against Iran, including potential strikes on energy and infrastructure targets, ahead of next month's U.S. midterm elections. The headlines revived concerns about the Strait of Hormuz, a chokepoint that has historically carried roughly a fifth of global oil and fuel trade. A sharp increase in attacks on tankers sailing through the Gulf added to the risk premium, lifting crude futures and, in turn, the USO ETF rally.
Hurricane Isaias Shuts In Gulf Output
A second, simultaneous supply threat came from the Gulf of Mexico. Hurricane Isaias forced producers to shut in roughly 512,000 barrels per day of crude output, about a quarter of the region's production, alongside more than 16% of its natural gas output. The storm-related shut-ins arrived at a fragile moment for global supply, compounding the market's sensitivity to any interruption.
Tighter-Than-Expected U.S. Inventories
Fundamentals reinforced the move. The U.S. Energy Information Administration reported a 3.2 million-barrel decline in crude inventories, a much steeper draw than the modest build many analysts had expected. Distillate inventories, including diesel, remained well below typical seasonal levels, keeping fuel markets tight and supporting the sector-driven move higher in crude and energy-linked funds.
Which Holdings Contributed Most
The United States Oil Fund does not hold a basket of individual stocks. Instead, it gains exposure primarily through near-month WTI crude oil futures contracts, so its performance tracks oil prices directly rather than the earnings of energy companies. For this reason, the entirety of Thursday's advance was driven by the price of crude itself, not by individual equities. That said, the same catalysts lifted major integrated producers, with energy giants like Exxon Mobil and Chevron gaining roughly 1.5% in pre-market trading, and leveraged crude vehicles such as UCO moving higher alongside the broader energy complex.
Market Context and Trading Activity
The advance aligned with a broad risk-on bid across the energy complex. Peer oil-linked funds and the Energy Select Sector SPDR Fund traded higher in sympathy, confirming that the move reflected crude-specific factors rather than isolated fund flows. Elevated volume accompanied the move as traders repriced supply risk, and USO climbed to its highest levels in more than a month. The rally follows a period in which the fund has already gained roughly 108% year to date, underscoring how sensitive it remains to each fresh headline on Middle East security and Gulf weather.
What Comes Next for USO
The outlook for USO remains tightly linked to crude's direction. Investors should monitor the path and intensity of Hurricane Isaias, the pace at which Gulf output restarts, and weekly U.S. inventory figures. Geopolitical developments, including any progress or breakdown in U.S.–Iran talks and the frequency of attacks on tankers near the Strait of Hormuz, will continue to set the near-term tone. Countervailing forces exist as well: coordinated strategic reserve releases by the International Energy Agency and alternative export routes could temper the risk premium, while higher fuel prices may rekindle inflation concerns ahead of key economic data. As a futures-based fund, USO also carries roll costs that can cause its returns to diverge from spot crude over time, a structural consideration for longer-term holders.
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Disclaimer
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
USO's RSI Oscillator peaks and leaves overbought zone
The 10-day RSI Oscillator for USO moved out of overbought territory on September 16, 2026. This could be a sign that the stock is shifting from an upward trend to a downward trend. Traders may want to look at selling the stock or buying put options. Tickeron's A.I.dvisor looked at 36 instances where the indicator moved out of the overbought zone. In 34 of the 36 cases the stock moved lower in the days that followed. This puts the odds of a move down at 90%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 07, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on USO as a result. In 71 of 88 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 81%.
The Moving Average Convergence Divergence Histogram (MACD) for USO turned negative on September 21, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 54 similar instances when the indicator turned negative. In 47 of the 54 cases the stock turned lower in the days that followed. This puts the odds of success at 87%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where USO declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 85%.
USO broke above its upper Bollinger Band on September 10, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Bullish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 1 day, which means it's wise to expect a price bounce in the near future.
Following a +4.65% 3-day Advance, the price is estimated to grow further. Considering data from situations where USO advanced for three days, in 301 of 333 cases, the price rose further within the following month. The odds of a continued upward trend are 90%.
The Aroon Indicator entered an Uptrend today. In 223 of 247 cases where USO Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 90%.
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