OOO - Betashares Crude Oil Index ETF - Currency Hedged (Synthetic)

[peter2]

Provides investors with a simple way to take a view on oil prices. Aims to track the performance of an index (before fees and expenses), that provides exposure to crude oil futures, with a currency hedge against movements in the AUD/USD exchange rate.

 

[peter2]

Currently the price of oil (POO) is the lowest it's been in 18 years. This low price is due to a major oil producing country (Saudi Arabia) lowering their sale price in a dispute with Russia.

Economic pressure will force the price higher as this low level is unsustainable because it's below cost of production. Currently the demand for oil is diminishing due to many countries deciding to stall their local economy in response to the worldwide corona virus pandemic.

 

[qldfrog]

Beware of ooo, it is hedged..not really at our advantage here at the present, then i am not sure how it managed but i do not feel it is tracking as expected
Pretty bad go for me here even after buying after the spectacular fall.probably the hedging details ..

 

[qldfrog]

But, as for POO, fully agree with @peter2 hard to go wrong on the medium term buying now...

 

[PZ99]

Beware of ooo, it is hedged..not really at our advantage here at the present, then i am not sure how it managed but i do not feel it is tracking as expected
Pretty bad go for me here even after buying after the spectacular fall.probably the hedging details ..

Same here. I think the exchange rate and divvies work against this etf.

I was holding when the POO went up 25% but only scored half of that so I sold out.

 

[qldfrog]

Was

Same here. I think the exchange rate and divvies work against this etf.

I was holding when the POO went up 25% but only scored half of that so I sold out.

Thinking about exiting myself and by Exon or similar

 

[PZ99]

I'm out of oil outright - there's sooo much oversupply that Australia should consider importing a few truckloads at the current prices and storing it here as a backup supply

 

[mikmac]

I'm out of oil outright - there's sooo much oversupply that Australia should consider importing a few truckloads at the current prices and storing it here as a backup supply

Oh if only our government had maintained a dwindling refining industry...or at least the recommended 90 days of fuels storage. Instead scotmo signed a deal this year with the US to access and lease a portion of their national reserve. Very helpful in a crisis no doubt

 

[Smurf1976]

Beware of ooo, it is hedged..not really at our advantage here at the present, then i am not sure how it managed but i do not feel it is tracking as expected

Looking at a 10 year chart of crude oil (WTI) and OOO it does track the price of oil pretty closely if you're looking at a monthly chart.

Move to a shorter time period and that's where issues can crop up depending on the actual dates in question.

So if your approach is looking at monthly or at least weekly charts then it's potentially useful. If you're trying to day trade then no.

As for the price of oil itself, well looking at inflation adjusted prices in USD oil has been above the current price for almost all of the past 70 years. Only exception is November 1998 - February 1999. Prior to that, you'd have to go back to March 1947 to find it cheaper. So it's fair to say that oil isn't this cheap very often.

 

[frugal.rock]

And the crowd goes OOO...ouch.

 

[Smurf1976]

And the crowd goes OOO...ouch.

Given that oil is now down to $2.06 per barrel, a price that was incomprehensible not too long ago and so far as I can find out is the lowest in real terms (inflation adjusted) since at least 1861 which is a rather long time to say the least.

That prompts a serious question - what happens to the ETF if the crude oil price were to go negative?

Anyone know an actual answer?

Ignoring how likely a negative oil price is or isn't, just assume for the purpose that it does go into negative territory. What happens to the ETF? Its price can't go negative? Or can it?

 

[PZ99]

Given that oil is now down to $2.06 per barrel, a price that was incomprehensible not too long ago and so far as I can find out is the lowest in real terms (inflation adjusted) since at least 1861 which is a rather long time to say the least.

That prompts a serious question - what happens to the ETF if the crude oil price were to go negative?

Anyone know an actual answer?

Ignoring how likely a negative oil price is or isn't, just assume for the purpose that it does go into negative territory. What happens to the ETF? Its price can't go negative? Or can it?

I've never heard of a fund that has tracked anything to zero or beyond. You would hope OOO would be suspended long before that eventuated so holders can get some of their money back.

 

[peter2]

The next months futures contract shows the price at $22/bbl down from $26 two days ago. It's very likely to fall to the spot price over the next month.

If you're thinking about buying OOO thinking it's a "sure" thing. BEWARE. Things are never this simple. There is NO easy money trading financial instruments and if you ever think there's a sure thing then it's 100% certain that there's something that you don't know or don't understand and it'll cost you.

 

[qldfrog]

Funny i received some distribution yesterday from OOOoo and was not even aware they had some.thanks God I sold OOO a few weeks ago before that drama.will they close at 0?

 

[qldfrog]

Not sure how Exxon BP and our local OSH BPT will handle this..
Outch xom -4.45%
Bp similar
Amza -2%
Barrel at -36$ a barrel ..unique
I own some of the above

 

[Dona Ferentes]

Energy traders bailed out of the expiring May US oil futures contract in a frenzy on Monday, sending the contract to a record of -$US35.20 (-$55.38) a barrel or a fall of 292.7 per cent at 4.34am AEDT as few buyers are willing to take delivery of actual physical barrels of oil because there is no place to put the crude.

Benchmark US crude oil for June delivery, which shows a more "normal" price, fell 16.5 per cent to $US20.90 per barrel.

With demand down 30 per cent worldwide due to the coronavirus pandemic, and the main US storage hub in Cushing, Oklahoma expected to fill up in a matter of weeks, very few want to be stuck with oil barrels that they have to take delivery on at some point during May.

Major oil-producing nations have agreed to cut output and global oil companies are trimming production, but those cuts will not come quickly enough to avoid a massive clog

 

[HelloU]

The next months futures contract shows the price at $22/bbl down from $26 two days ago. It's very likely to fall to the spot price over the next month.

If you're thinking about buying OOO thinking it's a "sure" thing. BEWARE. Things are never this simple. There is NO easy money trading financial instruments and if you ever think there's a sure thing then it's 100% certain that there's something that you don't know or don't understand and it'll cost you.

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sage words
my understanding is that ooo was fully into June contracts by 13th April (so May contracts were old news then).

 

[frugal.rock]

Down another 9.2% today to close on $4.24.... ooo ooo ouch.

 

[Junior]

Off the cliff now.

 

[So_Cynical]

Well its impossible for oil to stay this cheap forever, priced at forever but its not.