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Bottom-fishers buy the USO

Mar. 20, 2015 3:18 PM ETUnited States Oil Fund, LP ETF (USO)USOBy: Stephen Alpher, SA News Editor14 Comments
  • ETFs now own one-third of the most active U.S. oil futures contracts, according to the FT, and the bellwether U.S. Oil Fund (NYSEARCA:USO) has more than tripled in size this year, with assets of $3B today standing against $900M at the start of 2015 - this as crude oil prices have continued to decline.
  • Investors hoping to play a long-term bounce in oil, writes Chris Dieterich, should look for another spot as contango - oil prices on longer-dated futures above those on shorter-dated - will erode returns over time. In fact, even if oil prices rise over a period of years, one could lose a pile of money buying and holding USO.

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Comments (14)

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Scooter-Pop profile picture
Watch the OPEC Rig Count for an indication of the bottom. Their Rig Count is INCREASING.
Brian Bobbitt profile picture
Yesbut.. overall rig counts are dropping. reasons are simple.

Capt. Brian
The oily navigator
DavidLMO profile picture
I want USO to own 100 % and then we can set the price :-) Yay.

The run up this morning seems to be due to falling $. Rig count seemed to have little affect. PM falloff more concern over storage?

I was not following oil too closely today.
This is the same author that tried to manipulate the market earlier by saying oil was spiking premarket?
DavidLMO profile picture
Earlier When? WTI is traded 24 hours during the week. Shuts down Friday evening and picks back up on Sunday night. The after hours is on Globex.

WTI often goes up overnight here. You can follow oil futures here:

Usl may be good, shorting inverse Uso can be a good bet too
crockejo profile picture
USL better but you have to be careful with these oil ETFs they are not meant to be held long term and the decay will get you.
DavidLMO profile picture
Inverse USO?
woodywood.com profile picture
buy puts in DNO inverse WTI
so buy what ETF to avoid contango?
xlaffx profile picture
How USO priced is definitely unbelievable.... WTI Apr + 1.91 today, but WTI May only + 0.82 only. Such a big gap....
DavidLMO profile picture
What were the starting points? And ending points?
Brian Bobbitt profile picture
I think, perhaps, oil is not yet seen the bottom. Therefore, unless the company is well run such as FANG, FSLR, & SLCA, then perhaps you should exit oil related things for now. Short the price of oil, go long the good oil companies.

Look to hold and write covered calls on the spikes, and hold thru the down times.

Rarely is a good company a bad one to hold.

Capt. Brian
The Lost Navigator
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