U.S. Oil Fund Ordered to Limit Position, Faces Regulator Concern
- USO ordered not to ‘exceed accountability levels’ in futures
- ETF has repeatedly rolled forward futures contracts this week
Photographer: David Paul Morris/Bloomberg
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The biggest oil exchange-traded fund has once again reshuffled its portfolio in the wake of an unprecedented crude price collapse this week -- not by choice but because it was ordered to do so.
On Friday, the United States Oil Fund disclosed for the first time that it was ordered to make changes to its position by exchange operator CME Group Inc. It’s the fourth time in just over a week that the so-called USO has disclosed revisions to its portfolio that have shifted its holdings to contracts for oil delivery further into the future. The move comes at a time when interest in the retail product has skyrocketed. Investors are pouring record levels of money into betting on a bottom to this year’s relentless plunge in oil prices.