A $3.7 billion oil ETF is being forced to revamp its portfolio thanks to oil's historic plunge below $0
of the exchange-traded product - which is a regularly priced security that trades on exchanges similar to stocks. Oil demand has evaporated in recent weeks due to coronavirus-related global lockdowns, with the US crude oil price hitting its lowest-ever level. late in the trading day Tuesday, USO cited"extraordinary market conditions" and a"super contango" — when the futures price is higher than the spot price — that led to a decision to revamp its portfolio.
With around $3 billion in assets, USO plans to transfer money out of its crude oil futures contracts that will expire in June, to later-dated contracts and possibly"other permitted investments" based on energy products. United States Commodity Funds — which runs the USO fund — said that its anticipation of market conditions could lead it to take on"other oil-related investments" that allow for greater liquidity or to participate in transactions with"more favorable pricing.
Before the move to revamp its portfolio, USO's prospectus laid out investment objectives that state it invests primarily in futures contracts for light, sweet crude oil, diesel-heating oil, gasoline, natural gas and other petroleum-based fuels traded on the NYMEX and ICE exchanges. USCF announced in a
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
USDA's Supplemental Bailout Will Reach Farms Sooner and Deliver $3 Billion in Produce to Food BanksAlong with $16 billion in direct payments to farmers, the USDA also wants to buy their excess produce, dairy, and meat.
Read more »
SEC puts small plug in oil ETF loss gusherThe U.S. agency has stopped USO, a popular exchange-traded fund used by investors to bet on oil, from creating new shares. Stemming the fund’s growth may help trading in a futures market wracked by negative prices. But it won’t stop its investors facing huge losses.
Read more »
What plunging crude prices mean for the market's largest oil ETFTwo ETF analysts break down the action in the United States Oil Fund (USO), which has seen outsized trading volumes in recent days.
Read more »
ETF Edge PodcastIf you want to learn more about one of the fastest growing trends in investing, ETF Edge has you covered. Each week, CNBC's Stocks Editor Bob Pisani is joined by top market participants offering educational and actionable advice to help you build your best portfolio.
Read more »
US Oil Fund, popular ETF trading under ticker 'USO,' plunges 19% after brief halt
Read more »
US Oil Fund drops 30% after changing structure again as popular ETF tries to stave off collapse$USO, a popular oil ETF, has been halted, after saying it will change its structure again to stave off a collapse.
Read more »