The US Oil Fund (USO), the world’s hottest exchange-traded fund linked to petroleum prices. It was sitting on US$725.5 million in unrealized losses. On futures as of the top of March 2020, the fund said in an SEC filing in the week.
The fund, one among the foremost popular oil-tracking ETFs for retail investors. It was one among the explanations behind the historic decline in May WTI futures at the beginning of last week. within the days leading up to May WTI futures going negative. The USO fund existed its May positions by rolling it into the June and July contracts. The switch into the larger June contract only added to the amount of total paper barrels within the market. To not mention that the June contract will expire at a time. When even less storage is predicted to be available.
Bloomberg sources suggest
Bloomberg sources suggest that as of fortnight ago, the USO held 25 percent of the outstanding shares of May 2020 WTI oil futures.
According to the fund’s monthly account to the SEC from in the week. The USO booked a realized loss on futures of US$466.5 million as of March 31, 2020. As of that date, when oil prices were already heading south thanks to the crash in oil demand and therefore the Saudi-Russian price competition. The fund was sitting on unrealized losses of US$725.5 million on the market price of futures.
On Monday, the USO crashed oil markets again. After it said it planned to unload all of its WTI contracts for June delivery—that’s all its front-month contracts. Instead, the fund will now specialise in futures contracts that are further out. The USO’s breakdown will now be comprised of 30% within the July contract, 15% each as well as within the August, September, October, and December contracts, and 10% within the June 2021 contract.