I posted on this earlier here:
Bloomberg have more on this, link is here (gated):
In brief:
- The biggest US oil ETF is reviving the pre-pandemic investment strategy
- United States Oil Fund will, in September, begin reallocating the majority of its holdings to the nearest oil futures contract, rather than spread exposure across the futures curve
- The fund’s decision to pile into the front of the curve prior to the 2020 oil crash exacerbated the market turmoil that followed
After the 2020 oil price crash the CME ordered the fund to reallocate its funds across contracts. Iys a different time now, but this move may prompt an initial spike in oil price volatility.
—-
Also on Brent from earlier today:
Brent update for the first few hours of the week’s trading: