Yesterday Crude Oil ETFs had a day in the sun after a rough couple weeks and a failed breakout rally. For instance, having traded as high as $27.99 in mid September, DBO (PowerShares DB Oil) has retreated back below $26, including yesterday’s lift of 3.75%.
DBO, USO (U.S. Oil Fund), and OIL (iPath S&P GSCI Crude Oil ETN) are the three largest funds in the WTI Crude Oil category, holding about $2.5 billion cumulatively among them in assets under management. However, an ETF that is devoted to investing in Brent Crude Oil futures, BNO (U.S. Brent Oil Fund) has had a better 2012 than the funds that are tied to WTI Crude.
BNO has rallied 8.73% YTD, in stark contrast with the negative returns that WTI Crude Oil funds including USO (-10.92%), DBO (-9.02%), and OIL (-11.61%) have registered this year, and in the trailing one year period, BNO has rallied a notable 19.23%.
We saw some call option activity in USO yesterday amid the bounce in the commodity, and we suspect that it may be tied to commentary and interpretation following the Obama/Romney debate.
That said, Crude Oil linked ETFs will be worthy of focus throughout the fourth quarter given potential catalysts that may resurface concerning tensions in the Middle East as well as the reality of how the U.S. Presidential election may pan out.
U.S. Brent Oil Fund
For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at firstname.lastname@example.org.