no, contango/backwardation only plays an issue if the fund manages didn't sell their holdings that are rolling over, but the amount of futures they are buying and selling is meant to track the spot price. Futures are simply the means to the end, with the end being to track the spot price.
read the Prospectus.
also, the Market Price of the ETF is influenced by the buying and selling of its shares on the open market, the futures buying and selling only effects the NAV of the Fund, not Market Price of the Fund.
You really need to do yourself a favor and read the Prospectus.
USO doesn't follow WTI's future's price, it follows WTI's spot price, via buying and selling WTI futures.
You're mixed up regarding the Fund's mechanics.
"The shale oil boom that pushed U.S. crude production to the highest level in four decades is grinding to a halt.
Output from the prolific tight-rock formations such as North Dakota’s Bakken shale will decline 57,000 barrels a day in May, the Energy Information Administration said Monday. It’s the first time the agency has forecast a drop in output since it began issuing a monthly drilling productivity report in 2013."
Source: Bloomberg news
placing 'USO $8-9' after 'Kremlin Says' is pretty clever to misrepresent that the Kremlin actually commented on USO, but left yourself an 'out' by having two hyphens between the two, so you can say that denotes your own personal opinion, not the Kremlin's.
You should work for Fox or CNN.
ok, but it should be mentioned that he may feel this way because he's been reading USO's message board and doesn't feel the posts are good enough.
Sorry guys, maybe he read through the message boards and felt that no one was offering substantial evidence as to why oil isn't plunging down like everyone is predicting.
A poster incorrectly proposed that oil is down 8% today, and that it's time to celebrate being a short. That's a misrepresentation of what's actually happening.
The range is 48-54. If that stock is down 8% from 48, then yes, shorts have something to wet themselves over.
The reality though is that with every sudden down-move, the majority of it is recovered the same day, and then the remaining portion is recovered the following day.
I want to be short oil, but at the right price, which is 54, and considering that WTI Crude makes back its sudden down-moves easily, an entry into momentum below the 48-54 is not an easy trade.
Take your hands out of your pants, over celebratory shorts.
USO will either go up, down, or sideways.
he's busy deleting his reply to my comment and maybe others. by his response to me (which was just deleted by him), he acts drunk.