Crude Oil continues to be the story as we see another leg up there today (see USO (United States Oil, Expense Ratio 0.45%), USL (United States 12 Month Oil, Expense Ratio 0.88%), etc. on very heavy trading volume lately) and Oil rich and Oil sensitive countries are having a solid day thus far like Brazil (EWZ (iShares MSCI Brazil, Expense Ratio 0.61%), Russia (RSX (Market Vectors Russia Expense Ratio 0.63%), EWC (iShares MSCI Canada 0.49%) and UAE (iShares MSCI UAE, Expense Ratio 0.61%), and Qatar (QAT (iShares MSCI Qatar 0.61%) are up substantially today.
I, nor have commodity oriented managers that I have spoken with recently seen such pivotal late day Friday action in Crude Oil and linked ETPs as we did last week.
The carry over now two days after including this morning on even heavier volume, but the reality is this could be more than a large short squeeze. For reference purposes, on Friday USO had a $16 handle at one
point and is now trading above $19.
We spoke about consistent inflows in USO over a period of greater than a month into the drift lower in Crude Oil prices and this trend has continued, with the fund pulling in >$1.1 billion just year to date. USO remains the largest Crude Oil tracker across the U.S. listed ETP universe, and UCO (ProShares Ultra Bloomberg Crude Oil, Expense Ratio 0.95%) is interestingly the second largest product in the space with about $768 million in assetd under management.
Other “Long Oil” notables in terms of asset size that are also on the move are OIL (iPath S&P GSCI Crude Oil Total Return, Expense Ratio 0.75%), DBO (PowerShares DB Oil, Expense Ratio 0.75%), and BNO (U.S. Brent Oil Fund,
Expense Ratio 0.90%) and UWTI (VelocityShares 3X Long Crude ETN, Expense Ratio 1.35%) to name a few.
Trading volume and daily near term volatility continues to be extremely elevated (see a short term chart of UWTI for example) across the swath of Crude Oil linked Long/Leveraged Long and even in the case of several Inverse/Bear funds as well with Crude Oil prices on the move as they have been.
United States Oil Fund
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