Traders piled $1.6 billion into an oil ETF last week — right before prices went negative for the first time in history
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Carmen Reinicke
Apr 21, 2020, 01:56 IST
AP/Wong Maye-E
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Last week, traders put $1.6 billion into the United States Oil Fund LP, or USO, the best week of inflows on record for the exchange-traded fund, Bloomberg reported.
Oil prices were weighed down by May contracts expiring Tuesday. In addition, the industry has been hit hard by the coronavirus pandemic, which has cratered demand. Now, there is excess supply and worry that storage will soon run out, sending the contracts into negative territory.
The USO fund is designed to track the daily price movements of WTI crude oil, offering investors exposure to the commodity without a futures account. The fund composes 25% of all outstanding contracts in WTI crude futures, according to Bloomberg.
Last week, the USO ETF said it will move 20% of its contracts to the second-traded month, citing a supply glut pushing prices down on contracts near their delivery dates, Bloomberg reported.
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