Six Voices on What’s Going on in Oil ETF Engulfed by Blowup
- USO fund caught up in wild ride that took futures below zero
- Oil ETF has run out of shares to lend for shorting or creation
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The suspension of new share issuance by the biggest exchange traded fund tracking oil is adding layers of complexity to what was once a simple bet on the crude market.
Investors buying the United States Oil Fund right now aren’t just contending with supply and demand dynamics in oil, they’re navigating wrinkles in the mind-bogglingly complex mechanics that underlie ETFs. Those processes are usually invisible to the public and when shaken can have dangerous real-world consequences.