Yes, they are paying honest Americans to fill and hold the gas in their cars/trucks during this troubling time. All storage facilities land and sea are full at this point so your Chevy Tahoe is the next great strategic reserve.
I am pretty certain USO had the may accounted for, so that could explain why it isn't sitting at $0. With barrels now around -$37, anything can happen. The odds are it will go up quickly.
I believe WTI just closed at -$35 ... some people saying this is reflective of something worse happening behind the scenes that the price dropped this far below $0.
Alright..took my own advice. Bought TOT for a long term hold. They have 25 billion in cash and a solid balance shhet.
Well GILD killed the market, haha - not serious but it was silly stock got downgraded - since it was clear how trial was run from beginning... Anyway, I think as earnings come into play for more companies there will be a pullback regardless, I never expected oil to do this though. So now.... Yeah... Ie I expected lower oil but wow
USO holds June and July contracts right now - today's price has zero impact on USO. Oil prices tomorrow will show as $20. Every day, USO shifts about 5% of it's holdings and has to pay a 25% premium each time because of the shape of the curve. Meaning that USO is losing 25% of its value per month right now even if oil prices don't change.
Depends on the ETF you're talking about -- there is no one answer. If you're talking about USO, it trades in front-month contracts until sometime towards the end of the month where they roll a portion of those investments into the next month. USO should have already done this by now -- I'm not sure what that percentage is. This is why I tell people to stay away from these things if they don't know what they're doing.
Thanks for that info, great stuff. So if oil is up to $20 tomorrow, wouldn't the USO gain value? Or is it still going to be losing due to the premiums?
Yeah ET* is a mess really need to do DD and no good answer as there's so many to choose... I'll play some but typically very short.
No - it already owns the $20 oil. Here's its holdings: http://www.uscfinvestments.com/holdings/uso You can see its daily trades at the bottom - it buys JULY each day and sells JUNE. Here's the current prices of each: https://www.cmegroup.com/trading/energy/crude-oil/light-sweet-crude.html So if prices don't move, tomorrow, it will selling about 5% of its holdings for $20.39 and buy the same amount for $26.20 (28% premium). So if nothing changes between now and tomorrow afternoon, USO will lose about 5% * 28% of it's value - or about 1.4%. As long as the curve is that steep between the first two futures months, USO will keep losing a good amount of value daily. Unfortunately, there's no simple way to just invest in the spot price of oil, or even the future price of oil. The "simplest" is buying a futures contract for your preferred time frame, but as we see from WTI today, that can be chaos if you hold it too long.
I don't know how much it may rise or fall, but USO is already trading those June contracts. What some people think is that June prices will start to fall as well and they're shorting it. As usual, "this is not financial advice" (seriously).
I have a USO call I bought for cheap few weeks back ... I figured it was dead but it's coming back, hahah, it's 5/8 call... Seriously garbage call
Makes sense. There will still be low demand and no where to store it next month either so the next contract should crash.
