None.
From FT Alphaville:
Return of the bloated USO
Back in 2009, Olivier Jakob of Petromatrix was one of the first analysts to spot the weird effects that commodity ETFs were having on commodity future markets....MORE
It started with the USO, the oil ETP, and then went on to the UNG, a natural gas ETP
At the time, what was going on was a bit of a mystery. Why should these ETFs be bloating up even as professional investors were staying clear of the underlying assets backing the ETFs?
The standard response from the ETF industry was that ETF investors were just that much smarter. They were picking a bottom, and the bloating of the funds expressed confidence in the market.
While markets certainly turned around over the next few years, contango roll costs associated with the funds ensured that most passive investors who bought at the lows would have struggled to break even on their investments even with the appreciation.
And yet, it’s 2015 and here we are again. The USO is bloating up again, and heading swiftly to its 2009 near record position.
From Jakob on Wednesday:
In terms of investment flows going into WTI it also just doesn’t stop. The USO (WTI ETF) added 1’346 WTI contracts to its assets yesterday and now holds 61’793 WTI contracts. The USO is not yet to the record of 2009 when it held 96’523 WTI contracts but for comparison last year on the same day it held only 6’669 WTI contracts. The USO holdings of WTI contracts is more than 9 times higher than a year ago....
A quick look at the results of a search of the blog for 'USO':
Feb 2009
U.S. Oil Trust Investigated by CFTC (USO)
Which links to FT Alphaville's mini-series:
A ‘cancer’ in the oil markets?March 2009
Is WTI becoming an ETF derivative?
Feb 24: The United States Oil Fund mystery
Feb 25: A self-propelled pyramid?
Feb 26: Whatever happened to speculator limits on Nymex?
Oil: Beware the Rolls of March. And: Spreaders Heed Schork (USO)
August 2009
The great commodity ETF unwind. And: "That commodity ETF effect, in grains"
July 2010
"Amber Waves of Pain" Pitfalls in Commodity ETF's (DBA; MOO; RJA)
And a couple weeks ago:
Oil ETF About to Be Crushed By Contango (USO)
We've never understood why anyone would put money in this thing....
Since 2009: When oil is up the ETF is flat. When oil is down the ETF is down.
