Ernest Chan

The Oil ETF: What's Gone Wrong?

USO price is below the spot crude oil price because of the oil futures market is in contango right now: currently, everytime the crude oil contract roll over, the investor incur a loss because the next contract out is more expensive. -Ernie at epchan.blogspot.com

Crude Oil Is On the Rebound: Maximize Your Returns With These ETFs

Derek: Very interesting research! However, there is a danger in analyzing crude oil CL vs XLE data for only the last 2 years. I did some research (see my ) on the spread between CL and XLE since 2000, and found that from 2000-mid 2002, XLE has consistently outperformed CL, while from mid-2002 to until September 2006, CL has indeed outperformed XLE. The last few months have been a drastic reversal of fortunes. But if you believe in reversion to the mean, I agree with you that in the next few months, CL will once again outperform XLE.

-Ernie Chan