Oil ETF Changes Renewal Policy (USO)

Just a week after we posted Oil ETF is Moving the Market, the $3.4 billion U.S. Oil Fund LP (USO) has said it will renew expiring crude futures positions over the course of four days each month.

The current practice is to renew expiring positions in one day. However, the fund’s rapid growth has resulted in its renewal activities driving market prices.

In the article Oil ETF Aims to Curb Its Impact on Future, the WSJ says that the fund has become so popular that as of Tuesday it held 19% of all the crude for April delivery traded on the New York Mercantile Exchange, and 30% of a similar contract on the ICE Futures Europe exchange.

For more, see Investing in Oil with ETFs.

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