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



## peter2 (1 April 2020)

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.


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## peter2 (1 April 2020)

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.


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## qldfrog (1 April 2020)

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 ..


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## qldfrog (1 April 2020)

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


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## PZ99 (1 April 2020)

qldfrog said:


> 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.


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## qldfrog (1 April 2020)

Was


PZ99 said:


> 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


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## PZ99 (1 April 2020)

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


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## mikmac (1 April 2020)

PZ99 said:


> 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


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## Smurf1976 (1 April 2020)

qldfrog said:


> 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.


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## frugal.rock (20 April 2020)

And the crowd goes OOO...ouch.


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## Smurf1976 (21 April 2020)

frugal.rock said:


> 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?


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## PZ99 (21 April 2020)

Smurf1976 said:


> 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?
> 
> ...



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.


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## peter2 (21 April 2020)

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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## qldfrog (21 April 2020)

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?


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## qldfrog (21 April 2020)

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


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## Dona Ferentes (21 April 2020)

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


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## HelloU (21 April 2020)

peter2 said:


> 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.
> 
> View attachment 102501



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


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## frugal.rock (21 April 2020)

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


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## Junior (22 April 2020)

Off the cliff now.


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## So_Cynical (22 April 2020)

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


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## qldfrog (22 April 2020)

Small foray at 2.53 today


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## verce (22 April 2020)

What's going on? Can someone explain?


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## peter2 (22 April 2020)

The world's oil producers are churning out oil far in excess of the world's needs. Demand for oil products has dropped so fast that the over supply is rapidly filling the world's storage capacity. The price of oil is falling to encourage more buyers but they're not buying because there's fewer planes flying and people are driving much less than normal. 

Reducing oil production is not a simple process like turning off the pumps. There's more costs and there's a risk that the well cannot be restarted. 

Oil ETFs that track the spot oil price operate using futures contracts. The price of oil ETFs fall when the price of oil falls. The ETF administrators are having difficulty ascertaining the spot oil price due to the sudden increase in price volatility. Oil futures trade almost 24hr/day while the ETFs are only open during equity market hours. This closure means there may be large gaps in price from the prior days closing price when the ETFs open for trading the next day. 

The sudden increase in price volatility in all markets has exposed the disadvantages of ETFs as an investment product. This is clearly seen in the inverse ETFs that should go up by as much as their underlying benchmark when it goes down. They've been lagging further and further behind. 

I notice that @qldfrog has bought some OOO at $2.53. Nicely done. I would hope that the risk is capped at 2.53 but I'm not certain of this now that we've seen negative futures prices. Can ETFs go below zero also?


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## qldfrog (22 April 2020)

Just casino bet, 1k only, I think the odds are good for making money but indeed can OOO go back to 0, that is a question I have no answer,
but evenslight jitters up could allow me to sell and buy a coffee or 2 when we are free again to get out


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## PZ99 (22 April 2020)

My guess is if an ETF went below zero it would be akin to insolvent trading and should therefore be suspended from trading..  No? Otherwise they are paying me to buy their shares.
_(better check my stock transfer company details are up to date) _

Another guess is they could always do a consolidation to up the price.

I bought some for $2.55 also.


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## tonyparis (22 April 2020)

I was told by the guy who answered the phone at Betashares that no it could not go negative but that yes it could theoretically go to zero which would close the fund and investors would lose all their money. They would not halt trading on the fund.


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## PZ99 (22 April 2020)

tonyparis said:


> I was told by the guy who answered the phone at Betashares that no it could not go negative but that yes it could theoretically go to zero which would close the fund and investors would lose all their money. They would not halt trading on the fund.



Thanks for that. So it's a fund with no safety net or any protection whatsoever.

Instead of suspending trading pending higher prices they would rather just let you go broke.

Not healthy.


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## InsvestoBoy (22 April 2020)

PZ99 said:


> Thanks for that. So it's a fund with no safety net or any protection whatsoever.
> 
> Instead of suspending trading pending higher prices they would rather just let you go broke.
> 
> Not healthy.




It's an ETF with a stated purpose, not a market timing instrument. If you want to await higher prices, sell out and wait in cash or don't buy in the first place?


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## joeno (22 April 2020)

From what i understand, this ETF can't track the actual price of oil. What they do is sell futures they bought last month and buy into futures for the next. So if futures prices are higher than expected while spot price always crashes down due to lack of storage, then this ETF will continue bleeding til they get delisted.


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## PZ99 (23 April 2020)

O Well the futures is back up 22% at present so I might make a quick buck before it dies 

Kinda ironic how in 15 years we went from invading one country for oil only to now be storing it in another country because there's too much of it.


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## joeno (23 April 2020)

check out USO. its identical to OOO minus FOREX. It went down today. despite oil being up.


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## frugal.rock (23 April 2020)

Just an observation from a knife catcher...  from yesterday's plunge, the bounce back that may occur on open is possibly short lived.
Around 11:30 today, the truer direction will start to emerge in whatever direction.
Nothing stood out to me to buy yet...?

F.Rock


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## PZ99 (23 April 2020)

frugal.rock said:


> Just an observation from a knife catcher...  from yesterday's plunge, the bounce back that may occur on open is possibly short lived.
> Around 11:30 today, the truer direction will start to emerge.



My sell order is already queued.

Short lived just like the last one but thanks to Mr Trump for making both spikes happen


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## InsvestoBoy (23 April 2020)

USO is trading at a significant premium to NAV, so OOO.AX probably is as well.

What are you guys doing? Just gambling, and paying a hefty premium to get in the door of the casino.


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## PZ99 (23 April 2020)

InsvestoBoy said:


> USO is trading at a significant premium to NAV, so OOO.AX probably is as well.
> 
> What are you guys doing? Just gambling, and paying a hefty premium to get in the door of the casino.



Not me. I buy and sell for a profit. Discuss


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## InsvestoBoy (23 April 2020)

peter2 said:


> Can ETFs go below zero also?




No.


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## HelloU (23 April 2020)

just ann'd a change from 1 month to 3 month exposure.
1 month june20 contracts to be swapped for 3 month sept20 contracts.


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## PZ99 (23 April 2020)

Temporary change - full ann:


Spoiler



TEMPORARY CHANGE TO OOO’S UNDERLYING FUTURES EXPOSURE FROM ONE-MONTH TO THREE-MONTH WTI CRUDE OIL FUTURES CONTRACTS

The BetaShares Crude Oil Index ETF – Currency Hedged (synthetic) (the “Fund”) provides investment exposure to the performance of WTI crude oil futures. The Fund aims to track the performance of the S&P GSCI Crude Oil Index Excess Return (the “Index”) hedged into Australian dollars, before fees and expenses.

The Index includes the WTI crude oil futures contracts with the nearest expiration date i.e. futures contracts with one-month maturities which are rolling into the next month’s contract according to a regular cycle. The Fund’s investment exposure is obtained via a swap agreement.

Investors will be aware that the market for crude oil has recently been experiencing significant volatility. Indeed, for the first time in history, the WTI crude oil futures May 2020 contract traded at negative prices, ie below zero, intra-day on 20 April 2020.

While the Fund did not have investment exposure to the May 2020 futures contract at that time - as investment exposure had previously been rolled into the subsequent June 2020 futures contract, in accordance with the Index’s set schedule for rolling futures contracts - the front month (i.e. June 2020) futures contract has in recent days also experienced significantly higher levels of volatility.

In view of the unprecedented market developments in the last few days, and to reduce the risk to the Fund of the June 2020 futures contract trading at a negative price (*which would reduce the Fund’s value to zero*), BetaShares considers it prudent, and in the best interests of unit holders, to temporarily replace its investment exposure to the one-month (currently June 2020) contract with exposure to the three-month (currently September 2020) contract with immediate effect and until further notice, by arrangement with the swap provider.

While this change can be expected to temporarily result in a higher level of tracking error for Fund performance relative to the Index than would otherwise be the case (as the Index will continue to reflect the one-month contract), *BetaShares considers that the longer-dated futures contract should have relatively lower volatility, and that exposure to it should reduce the risk of the Fund, and unit holders, experiencing a permanent loss of capital.* Given the high level of risk in the global oil market, investors should nevertheless exercise caution.
In the current unprecedented market conditions, the significant declines in oil prices and the unusually high cost of rolling futures in near months have negatively affected Fund returns. BetaShares believes that the temporary change to longer-dated futures contracts noted above should reduce the cost of rolling futures.

BetaShares will continue to closely monitor market developments and will notify investors of any further updates to the Fund’s investment approach.
As this information does not take into account the personal circumstances of any particular investor, investors should consider consulting their financial adviser regarding this announcement.


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## frugal.rock (23 April 2020)

So they are obviously fairly worried about the fund hitting 0.
Have no idea about futures, but what's the great benefit of the 3 month contract ?

A side thought is, how many barrels got sold at negative prices?
Big volume or 5000 barrels?


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## tonyparis (23 April 2020)

frugal.rock said:


> Just an observation from a knife catcher...  from yesterday's plunge, the bounce back that may occur on open is possibly short lived.
> Around 11:30 today, the truer direction will start to emerge in whatever direction.
> Nothing stood out to me to buy yet...?
> 
> F.Rock




From a newbie knife catcher that is at the hospital getting stitches please let me know when something stands out for you to buy


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## cutz (23 April 2020)

HelloU said:


> just ann'd a change from 1 month to 3 month exposure.
> 1 month june20 contracts to be swapped for 3 month sept20 contracts.




That's going to cost a fortune, currently the jun/sep calendars are trading at $11.70 !!


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## InsvestoBoy (23 April 2020)

frugal.rock said:


> Have no idea about futures, but what's the great benefit of the 3 month contract ?






tonyparis said:


> From a newbie knife catcher that is at the hospital getting stitches please let me know when something stands out for you to buy






I'm just watching this thread like


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## tonyparis (23 April 2020)

cutz said:


> That's going to cost a fortune, currently the jun/sep calendars are trading at $11.70 !!




Are we talking negative or positive?

if it’s positive I am popping the champagne


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## cutz (23 April 2020)

tonyparis said:


> Are we talking negative or positive?
> 
> if it’s positive I am popping the champagne




Negative mate,

It's going to cost the fund dearly to roll those contracts, but I guess it's already been priced into the ETF price ??  Dunno you tell me...


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## tonyparis (23 April 2020)

Don’t ask me!

insvestro boy will know


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## InsvestoBoy (23 April 2020)

cutz said:


> Negative mate,
> 
> It's going to cost the fund dearly to roll those contracts, but I guess it's already been priced into the ETF price ??  Dunno you tell me...




As I said, these ETFs are trading at a premium to NAV.

You can see here https://www.betashares.com.au/fund/oil-etf-betashares/ the iNAV is 2.812 and closing price is 2.96 so aside from spread and ridiculous fees+swap costs for FX hedging, you're paying 5.26% above NAV.

Now the fund is going to sell whatever Jun WTI futs they have for $15 and buy Sep futs $26. If, for example, the fund holds 100 Jun WTI contracts, they will soon be holding just 57 Sep WTI contracts.

I don't think that will get priced in until they actually roll and the NAV reflects it.


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## cutz (23 April 2020)

Thanks mate, 

Good info, now I've got a reason to break out the webiress !


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## $20shoes (23 April 2020)

Smells a bit toxic


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## frugal.rock (24 April 2020)

Doh


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## frugal.rock (24 April 2020)

InsvestoBoy said:


> I'm just watching this thread like




Very helpful IB.
Thank you most graciously for your assistance in helping Mule's like me further their understanding of spinning wheels.
Cheers.
F.Rock


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## tonyparis (24 April 2020)

eee ooo


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## qldfrog (24 April 2020)

Oil +20pc overnight ooo -5pc
:-(


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## cutz (24 April 2020)

qldfrog said:


> Oil +20pc overnight ooo -5pc
> :-(




NAV down from yesterday, probably the cost of rolling positions last night, quite a bit of volume traded !


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## Smurf1976 (24 April 2020)

I wouldn't be surprised if this ETF ends up being wound up in due couse.

All of a sudden the problems seem to have come to widespread attention - it's being discussed on non-financial forums too, it's not something that has come to the attention only of those with a keen interest it's more widespread than that. 

That being so, who's buying any significant volume?


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## PZ99 (24 April 2020)

I wish I knew how to short stuff 

https://www.shortman.com.au/stock?q=ooo


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## Noob69 (24 April 2020)

Ok y'all. With all that's transpired, ASX:OOO is currently at $2.85. Who's having a punt?


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## tonyparis (24 April 2020)

Relevent article ):

*Aussie ETF investors got oil bets wrong before crash*

BY KANIKA SOOD  |  THURSDAY, 23 APR 2020   4:39PM
*
Australians last week poured $35 million in the country's only ETF tracking crude oil futures, and were stung hard when WTI May contracts slipped into negative territory in Monday's trading.*

BetaShares Crude Oil Index ETF (OOO) tracks an index composed of WTI crude oil future contracts, focusing on shorter-dated deliveries, and is the only such ETF exposure in Australia.

Last week, OOO attracted the second-highest inflows of all ETFs in Australia (second to a shorting ETF), as investors put in net $35 million, likely expecting oil prices to stabilise after the recent OPEC deal to cut down production by 30% in the wake of an oversupply.

On Monday, May WTI futures contracts slipped into negative territory for the first time, as COVID-19 shutdowns continue to bog down demand and traders run out of space to store oil.

It's not only Australian investors that were caught wrong footed on the direction of WTI futures.

In the US, investors poured over US $1 billion into the United States Oil ETF (USO), Bloomberg reported.

Oil prices' crash has made OOO the worst-performing ETF for all listed on the ASX. It ended Friday down nearly -70% since the start of the year, as well as on a 12-month basis.

On Thursday, BetaShares announced the ETF will replace its exposure to future contracts with one-month maturities (June for the ETF, as it doesn't have May exposure) to three-month maturities (September) as it sees the risk of June contracts trading at negative prices.

"While this change can be expected to temporarily result in a higher level of tracking error for fund performance relative to the index than otherwise would be the case (as the index will continue to reflect the one-month contract), BetaShares considers that the longer-dated future contract should have lower volatility, and that exposure to it should reduce the risk of the fund and unitholders experiencing a permanent loss of capital," it said

"Given the high level of risk in the global oil markets, investors should nevertheless exercise caution."


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## Noob69 (24 April 2020)

tonyparis said:


> Relevent article ):
> 
> *Aussie ETF investors got oil bets wrong before crash*
> 
> ...




Well, I hope the comeback is greater than the setback for current investors.


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## frugal.rock (24 April 2020)

tonyparis said:


> *"Given the high level of risk in the global oil markets, investors should nevertheless exercise caution."*



It's a mugs game at the moment.
The situation is no where near resolved. 
If this ETF survives until oil supply demand situation is properly on the mend, I may be interested then. 
Weeks minimum, more likely months.


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## qldfrog (25 April 2020)

frugal.rock said:


> It's a mugs game at the moment.
> The situation is no where near resolved.
> If this ETF survives until oil supply demand situation is properly on the mend, I may be interested then.
> Weeks minimum, more likely months.



I bought that parcel at 2.55 as a gamble, but i used to use this etf with substantial amount in the past.i was luckily out of oil when the fall happened but the disconnect between poo and this etf, even going into different direction is a no go for me now and a clear warning about similar ETFs
I am long oil mid, long term and bought XOM Exxon, BP and amza on the US market after the fall


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## frugal.rock (25 April 2020)

I drew a line chart in the condensate on the kitchen window a few nights ago...
1 line represented the poo.
1 line represented production/ supply.
1 line represented demand.

Other inputs could be storage capacity data, am wondering if the large storage sites are getting near full capacity?
Demand is? will be probably on a generally steady, but slow and sure increase as lockdown restrictions are lifted on the worldwide level.
So for now, production is slowing.
Production and demand are still well diverged, watch for the closure of this as the poo should start acting according to the laws.
Can anyone throw up a chart of this?
Cheers.

F.Rock


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## Smurf1976 (25 April 2020)

qldfrog said:


> the disconnect between poo and this etf, even going into different direction is a no go for me now



Likewise and I expect many will be of similar views.

It's one thing to underperform but it's another thing entirely to go in the opposite direction.


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## Smurf1976 (25 April 2020)

frugal.rock said:


> am wondering if the large storage sites are getting near full capacity?



I posted a chart in the oil price thread but in short, according to some seemingly credible estimates the world had filled up somewhere around half of the pre-2020 empty storage as of mid-April.

At that rate it'll be full sometime in may and a related issue is that it won't all reach full on the same day, so we'd likely see problems start to emerge regionally before the whole lot is full. If that's true then such problems are days or at most weeks away from happening.

A related issue is that demand for some products, eg jet fuel, has outright collapsed versus only a modest decline for diesel. The refineries do have some ability to adjust the mix of what they produce but that ability isn't unlimited. Due to the fundamental chemistry involved they're still going to be sending out other things to some extent and that creates an issue of storing products as well as crude.


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## frugal.rock (25 April 2020)

So, we've had the panic drop about the impending situation still to come and resolve.... good luck frog! 
The hopping off window is closing...
@qldfrog 
Some light reading regarding cancelled orders. Page 19
ASX OPERATING RULES
PROCEDURES
attached.
There was some discussion by ASX and ASIC recently I believe about some changes. Don't know of any outcomes myself?


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## cutz (25 April 2020)

frugal.rock said:


> Some light reading regarding cancelled orders. Page 19




Hello,

That relates to fat finger option trading errors.

Many years ago my friendly local broker entered a 4 leg combo order ( which I had rung through ) with one of the legs pointing the wrong way, I didn't see it hit the market on my platform but I was informed that it had traded straight away. When I checked the emails and to my horror I discovered a huge pricing error. We put in a trade cancellation request  ( via comms broker and asx ), two legs were approved for cancellation, the remaining legs were reversed on market and my broker covered the remaining loss, tense moments indeed !!

Thanks, I finally got around to reading the document  .


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## aus_trader (25 April 2020)

qldfrog said:


> I bought that parcel at 2.55 as a gamble, but i used to use this etf with substantial amount in the past.i was luckily out of oil when the fall happened but the disconnect between poo and this etf, even going into different direction is a no go for me now and a clear warning about similar ETFs
> I am long oil mid, long term and bought XOM Exxon, BP and amza on the US market after the fall



I have also had a few asx:"OOO" trades in the past and I have mentioned about those in my portfolios here on ASF in the past. It's certainly not behaving like it did back in 2017 for example, when it tracked the price of Oil reasonably.

This is really odd times indeed !

How are you able to buy stocks that trade on different exchanges ? For example Exxon Mobile is on the USA stock exchanges and BP is on the London Exchange. Which stock broker offers all these ?

By the way "AMZA" is a strange one, if "OOO" was hard to grasp in these times, AMZA is like


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## Smurf1976 (26 April 2020)

aus_trader said:


> It's certainly not behaving like it did back in 2017 for example, when it tracked the price of Oil reasonably.



In generic terms I think what we've seen is a series of events similar to that which has long concerned gold enthusiasts.

The idea that "paper" gold, oil or anything else fails to track the real physical commodity in a crisis and that the "paper" version ends up worthless or close to it has long been a concern they've expressed. Details aside, that basic concept has to some extent been seen here.


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## aus_trader (26 April 2020)

Smurf1976 said:


> In generic terms I think what we've seen is a series of events similar to that which has long concerned gold enthusiasts.
> 
> The idea that "paper" gold, oil or anything else fails to track the real physical commodity in a crisis and that the "paper" version ends up worthless or close to it has long been a concern they've expressed. Details aside, that basic concept has to some extent been seen here.



True. I only have exposure to paper Gold as well, nothing physical in the case for Gold. Not going to sell the paper gold ETFs because I don't see a viable way to store physical Gold without ongoing storage costs. I discussed about the pros and cons in another thread on ASF about Gold storage some time back.

I am going to concentrate more on Gold miners going forward and less investing in Gold ETF's.

I guess it's hard to see how everything plays out far into the future at the time you invest, but as times change we need to adapt in order to survive.

These are unprecedented times where extreme outlier theories are coming to life in front of your eyes


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## Smurf1976 (26 April 2020)

aus_trader said:


> These are unprecedented times where extreme outlier theories are coming to life in front of your eyes




If anyone had suggested prior to the past few days that we'd see a situation where a roll of toilet paper was worth more than an entire tanker load of oil then anyone hearing that would have assumed that either the person saying it was insane or that they'd missed some details of the joke being told. 

That it actually did occur, at least "on paper", says an awful lot really. Things which seemed so far fetched they weren't even contemplated are actually happening "just like that" which raises the obvious question as to what other such events may occur?

Any instrument which aims to track the price of something else without actually owning it is at least a bit suspect right now in my view.


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## qldfrog (26 April 2020)

aus_trader said:


> I have also had a few asx:"OOO" trades in the past and I have mentioned about those in my portfolios here on ASF in the past. It's certainly not behaving like it did back in 2017 for example, when it tracked the price of Oil reasonably.
> 
> This is really odd times indeed !
> 
> ...



I opened a trading account overseas via comsec
They use Pershing in NYSE, brokerage is horrendous: down from USD29.95 minimum to USD19.95 usd..but still
 ,their exchange rate is horrible but  I moved AUD at a time where it was higher then the USD...remember,?
The trading platform site is ok and reporting for taxes here OK
Overall i would recommend them for investors with only a few trades there a month


----------



## Miner (26 April 2020)

qldfrog said:


> I opened a trading account overseas via comsec
> They use Pershing in NYSE, brokerage is horrendous: down from USD29.95 minimum to USD19.95 usd..but still
> ,their exchange rate is horrible but  I moved AUD at a time where it was higher then the USD...remember,?
> The trading platform site is ok and reporting for taxes here OK
> Overall i would recommend them for investors with only a few trades there a month



Hmm.
AUD was higher than USD, in 2011 when I took my first expat assignment. Just keeping in USD then you would have earmmned cool 40 pc by now. Average a little more than 4 pc return as a passive income. Cool.


----------



## aus_trader (26 April 2020)

qldfrog said:


> I opened a trading account overseas via comsec
> They use Pershing in NYSE, brokerage is horrendous: down from USD29.95 minimum to USD19.95 usd..but still
> ,their exchange rate is horrible but  I moved AUD at a time where it was higher then the USD...remember,?
> The trading platform site is ok and reporting for taxes here OK
> Overall i would recommend them for investors with only a few trades there a month



Yes if you are not constantly buying and selling securities from overseas markets i.e. shorter term trading that sounds OK for strategic positions in companies.

Totally agree qldfrog and Miner, conversion rate is a killer at the moment !







I wished I parked some AUD in USD when it was near parity


----------



## qldfrog (27 April 2020)

OOO: sold my punt at @2.61, purchased nearly at the bottom 2.53
My broker took $20 of brokerage fees and I made a tiny profit of $!!..or 2 coffees when I will next be able to go there..
Greed cost me, as I had a sell order at around $300 profit, and missed by a few cents..
Anyway, better place for money than gambling on OOO with the next to come move and change of rules


----------



## Smurf1976 (27 April 2020)

One question I have is to what extent is this ETF, or more importantly its US equivalent, making the market rather than tracking it?

If the ETF holds a decent portion of the futures contracts as seems to be the case, and needs to sell them prior to expiry because they sure don't want physical delivery, well then the ETF would seem to be a key driver of the plunge to negative values which occurred would it not? It was the ETF that simply had to exit no matter how low the price went, right?

If that's the case then the ETF at least with its previous mode of operation is too big to be effective.

Now I wonder what other ETFs might have this probem?


----------



## peter2 (27 April 2020)

Some interesting opinion articles on the oil crisis at Bloomberg.
https://www.bloomberg.com/opinion/a...il-prices-have-wreaked-havoc-on-the-etf-model

In short USO has fallen >80% since the start of 2020 (4 months ago) and has now lost 90% over 14 years. The ASX oil ETF- OOO has also lost 80% in four months this year (2020).

It's highly likely that the oil contango will continue and these ETFs will lose more next month, unless there is some significant production cuts. 

The ETF administrators are changing their rules to keep their ETFs solvent and avoid having to pay up themselves as the ETFs cannot go below zero. The ETFs no longer track the daily price of oil as they're buying longer dated futures contracts. 

In spite of their abominable record as an investment, in flows into oil ETFs was massive last week as the ignorant pile in at the low prices. Meanwhile hedge funds holding shorts are cleaning up. 

USO was holding approx 20% of the open interest in the May futures contracts and their selling (rolling over) most definitely exacerbated the price crash.


----------



## cutz (27 April 2020)

peter2 said:


> The ETF administrators are changing their rules to keep their ETFs solvent and avoid having to pay up themselves as the ETFs cannot go below zero. The ETFs no longer track the daily price of oil as they're buying longer dated futures contracts.




Old news, 8:1 reverse split on US oil happening tomorrow, the model seems to be so broken that it can't even be shut down !!


----------



## aus_trader (28 April 2020)

qldfrog said:


> OOO: sold my punt at @2.61, purchased nearly at the bottom 2.53
> My broker took $20 of brokerage fees and I made a tiny profit of $!!..or 2 coffees when I will next be able to go there..
> Greed cost me, as I had a sell order at around $300 profit, and missed by a few cents..
> Anyway, better place for money than gambling on OOO with the next to come move and change of rules



Looking at the Futures, Oil could be having another leg down from the recent 3 day recovery, so you may have got out lightly:


----------



## PZ99 (28 April 2020)

They should change this code to triple zero. Apart from the obvious connotations of impending danger it's also a spiritual reset 

However, supply / demand distortions of this magnitude have their use by dates...

https://www.aussiestockforums.com/posts/1069643/

So it remains on my watchlist.


----------



## InsvestoBoy (28 April 2020)

Did anyone listen to the most recent Macrovoices Hot Topic with Jim Bianco?

I would suggest any OOO investors take a listen.

Personally after listening to the episode it has me worried about BetaShares themselves as the custodian of this fund and I am considering whether I should get out of QUS and avoid exposure to them altogether, potentially big pain on the horizon for them.


----------



## qldfrog (28 April 2020)

InsvestoBoy said:


> Did anyone listen to the most recent Macrovoices Hot Topic with Jim Bianco?
> 
> I would suggest any OOO investors take a listen.
> 
> Personally after listening to the episode it has me worried about BetaShares themselves as the custodian of this fund and I am considering whether I should get out of QUS and avoid exposure to them altogether, potentially big pain on the horizon for them.



Thanks for the hint @InsvestoBoy 
Will try to get the podcast


----------



## Dona Ferentes (28 April 2020)

InsvestoBoy said:


> Did anyone listen to the most recent Macrovoices Hot Topic with Jim Bianco?
> 
> I would suggest any OOO investors take a listen.



can but agree. ... 50 minutes well spent, and most of the questions asked here should be answered. (Have just read through this thread)


----------



## InsvestoBoy (28 April 2020)

Smurf1976 said:


> One question I have is to what extent is this ETF, or more importantly its US equivalent, making the market rather than tracking it?




At this point, USO and friends have definitely become the long side of the market.



> If the ETF holds a decent portion of the futures contracts as seems to be the case, and needs to sell them prior to expiry because they sure don't want physical delivery, well then the ETF would seem to be a key driver of the plunge to negative values which occurred would it not? It was the ETF that simply had to exit no matter how low the price went, right?




No because the ETF had already rolled to the next month contract long before prices went negative.

Now that the dust has settled it is apparent the culprits were some doofuses on Interactive Brokers who held about 15% of the Open Interest, plus Bank of China who were abusing their "bonafide hedger" status at the exchange to sell structured products to their customers.



> If that's the case then the ETF at least with its previous mode of operation is too big to be effective.




Yes. If you listen to the podcast episode I suggested, you will see why this is about to become a huge problem, forget what we just saw.



> Now I wonder what other ETFs might have this probem?




Other oil tracking ETFs, yes. Other commodity tracking ETFs which hold oil futs, maybe. Otherwise probably not many if any.


----------



## derangedlawyer (29 April 2020)

https://www.asx.com.au/asx/share-price-research/company/OOO

On 21st April futures price went in the negative xx$.. this ETF was trading at 4.24. Following day (22nd April) oil recouped in positive digits but OOO dropped to 2.6 which is a massive 39% drop in a day.
On 23rd April they announced (https://www.asx.com.au/asxpdf/20200423/pdf/44h5v9q79z7nnl.pdf) a "TEMPORARY CHANGE TO OOO’S UNDERLYING FUTURES EXPOSUREFROM ONE-MONTH TO THREE-MONTH WTI CRUDE OIL FUTURES CONTRACTS". 

What is going on with this ETF? 
Doesn't seem to track oil's upwards movements at all. 
Including today 29th April which was a good day for oil futures, nevertheless OOO's market maker still set the price at yesterday's value of 2.52.

Thoughts on this? 
I am considering contacting the regulators.


----------



## InsvestoBoy (29 April 2020)

derangedlawyer said:


> I am considering contacting the regulators.




Gonna call up and say you didn't read the PDS or understand the market but you thought it'd be a good punt and demand they take action? Let us know what they say.


----------



## aus_trader (29 April 2020)

The problem is these are synthetic ETF products. They stop corelating to the underlying when Oil starts doing funny business like going into the -ve.

The equivalent US ETF "USO" is supposed to do a reverse split and may attract some traction as it has also been hosed down lately. Not sure how much this will affect the local ETF "OOO".


----------



## cutz (29 April 2020)

Bloody crazy, the fund need to be shut down till things stabilise. Too many shmuks investing in things they don't understand !

Tonight should be interesting post split..


----------



## InsvestoBoy (29 April 2020)

aus_trader said:


> The problem is these are synthetic ETF products. They stop corelating to the underlying when Oil starts doing funny business like going into the -ve.




No, aside from retail bidding it up above NAV, it doesn't stop correlating to the underlying, because the underlying is WTI futs.

People think it stops correlating because they didn't do any due diligence at all and just saw some chart on the evening news saying oil was down and think they can pull a Rockefeller using SelfWealth or something? They never looked at the chart compared to cash WTI to see it is nearly always getting eaten by contango, they never looked at the PDS, they never even looked at the iNAV.


----------



## Dona Ferentes (29 April 2020)

from the AFR

_A statement of the bleeding obvious from exchange traded fund provider BetaShares has come a little too late for investors wrong-footed by the volatility in oil prices. In its third update to the ASX in five days, the purveyor of the BetaShares crude oil index ETF riffed on the immediate rollover of near-month oil futures contracts announced by S&P Dow Jones Indices, which provides the index upon which their ETF is based.

The unscheduled rollover of the West Texas Intermediate contract from the June contract to the July contract prompted BetaShares to lament that "the announcement by the index provider is further confirmation of the high level of risk associated with exposure to the near-term WTI crude oil futures contract."

You don't say? The problem is that up until last week that very exposure was the bedrock of its investment strategy and that of large overseas exchange traded products like the US Oil Fund.

Having watched the value of its ETF plummet from a high of $16.56 on January 6 to a record low of $2.50 on Wednesday, the BetaShares ETF has switched its exposure from the near term month contract to the September contract.

While a higher tracking error won't deliver investors the exposure they thought they were buying, it is hoped the September contract will be less volatile and insulate it from another bout of negative prices. 

BetaShares was blunt about the consequences of negative prices in an updated product disclosure statement: "In such circumstances the responsible entity may need to consider whether the fund should be terminated.”

The surprising move by S&P Dow Jones Indices - and its launch of a review of its commodity indices, rollovers, and negative oil prices - looms as the denouement for futures-based exchange traded oil products.

It highlights how the combination of oversupply and demand destruction sparked by COVID-19 - and the attendant warping of prices into negative territory - has investors scrambling for a solution amid expectations for a protracted period of weak and volatile prices.

*The profound flaws of oil ETFs have been revealed by the swelling glut of oil that pushed WTI prices to negative $US40 a barrel last week.

The market contango, or when longer term prices are higher than short term prices, has made them forced sellers at low prices and motivated buyers at high prices.

The bringing forward of the rollover from the June contract to July contract saw the contango between the two widen to over $US7 a barrel at one point.*_


----------



## wabullfrog (29 April 2020)

Hi all, first post & here to admit as newbie investor I look to have made my first not so good (slight understatement there!) buy with OOO. Purchased 4 weeks ago & thought I was a genius when price rose during the next week, following weeks have shown I am very far from that


----------



## derangedlawyer (29 April 2020)

aus_trader said:


> The problem is these are synthetic ETF products. They stop corelating to the underlying when Oil starts doing funny business like going into the -ve.
> 
> The equivalent US ETF "USO" is supposed to do a reverse split and may attract some traction as it has also been hosed down lately. Not sure how much this will affect the local ETF "OOO".




Fair point.
USO however has been signficantly more stable than OOO, overlapping the two charts in the last 2 weeks.
I guess my point is that a *39% drop in one day* like the one mentioned in my post above and a stark misreprentation of the underlying asset are different from minor discrepancies and loss of value normally expectable in ETFs.



cutz said:


> Bloody crazy, the fund need to be shut down till things stabilise. Too many shmuks investing in things they don't understand !
> Tonight should be interesting post split..




It's _schmuck_. You sarcastic schmuck.



InsvestoBoy said:


> No, aside from retail bidding it up above NAV, it doesn't stop correlating to the underlying, because the underlying is WTI futs.
> 
> People think it stops correlating because they didn't do any due diligence at all and just saw some chart on the evening news saying oil was down and think they can pull a Rockefeller using SelfWealth or something? They never looked at the chart compared to cash WTI to see it is nearly always getting eaten by contango, they never looked at the PDS, they never even looked at the iNAV.




The three points you seem to make:
1- I didn't read the PDS and never monitored the fund's iNAV
2- I wasn't aware the underlying of this ETF being S&P GSCI crude oil index nearest contract futures
3- Contango justified a 39% drop in one day from 21st to 22nd April.
_On 21st April futures price went in the negative xx$.. this ETF was trading at 4.24. Following day (22nd April) oil recouped in positive digits but OOO dropped to 2.6 which is a massive 39% drop in a day._

Please prove #3.
For convenience, go to page 32 of https://www.betashares.com.au/files/collateral/pds/QAG-OOO-QCB-pds.pdf and enlightmen me of what could have justified that drop.


----------



## peter2 (29 April 2020)

This is for you @cutz .  "I'm itm".


----------



## Dona Ferentes (29 April 2020)

itm; is that like lol?

@disturbedavocado  _Thou doth protest too much, methinks_


----------



## cutz (29 April 2020)

peter2 said:


> This is for you @cutz .  "I'm itm".
> 
> View attachment 103058




Ha ha, congrats,  It's WTFITM !!


----------



## aus_trader (29 April 2020)

InsvestoBoy said:


> No, aside from retail bidding it up above NAV, it doesn't stop correlating to the underlying, because the underlying is WTI futs.
> 
> People think it stops correlating because they didn't do any due diligence at all and just saw some chart on the evening news saying oil was down and think they can pull a Rockefeller using SelfWealth or something? They never looked at the chart compared to cash WTI to see it is nearly always getting eaten by contango, they never looked at the PDS, they never even looked at the iNAV.



Well, I am not saying it doesn't have problems like contango which slowly eats away at it. But in the past I remember it behaved somewhat like other ETFs that track the underlying. So "OOO" will be up when POO is up and it'll be down when POO is down. That relationship is broken at the moment, so that's the problem.



cutz said:


> Tonight should be interesting post split..



Yes, looking forward to it to see if USO gets some attention and goes higher afterwards.

Then whether that gets reflected in some way on the local market with "OOO" tomorrow...


----------



## aus_trader (29 April 2020)

wabullfrog said:


> Hi all, first post & here to admit as newbie investor I look to have made my first not so good (slight understatement there!) buy with OOO. Purchased 4 weeks ago & thought I was a genius when price rose during the next week, following weeks have shown I am very far from that




I think a lot of people including professional traders/investors and investment funds, all got caught by this debacle. This is history in the making and we are still in the middle of it


----------



## aus_trader (29 April 2020)

peter2 said:


> This is for you @cutz .  "I'm itm".
> 
> View attachment 103058
> 
> ...



Pre-market is getting the price about right: 
Prev. Close = $2.14
8:1 consolidation: 8 x $2.14 = $17.12

It'll be what happens once the market opens, that'll be interesting. up/down ?


----------



## Smurf1976 (29 April 2020)

aus_trader said:


> I think a lot of people including professional traders/investors and investment funds, all got caught by this debacle.



I think there's a broader point that just because two things are correlated, even if they are highly correlated, does not mean they are the same. It is thus not impossible that the correlation fails or even outright reverses at some point.

OOO and the spot price of crude oil are one example of that since they aren't actually the same thing.

Another example would be that owning shares in several major airlines and trucking companies is a sort of short position in oil. Arguably true if the only thing that happens is the oil price falls but most certainly not true if the reason for the oil price falling is that every airline in the world is all but grounded and people are in lockdown.

Another example would be the idea that the Australian Dollar is tied to commodity prices. No doubt there are possible scenarios where that fails. Etc.

I think the broad lesson here applies far more widely than just to this ETF. Correlations aren't direct ties and can fail which gives rise to the scenario where someone gets it right in terms of the price direction of something but completely fails at profiting from it because they traded an instrument that failed to replicate the price move despite having historically done so.


----------



## peter2 (29 April 2020)

@aus_trader  Unfortunately the retail (dumb) money will buy USO with all they've got. The hedge funds will short it and take the money from the retail buyers every month while the price contango exists. My US broker stopped allowing shorts on USO a while ago. I'll be interested to see if they'll allow it now the price is much higher.

That 50min podcast is a must watch. Thanks @InsvestoBoy  for the link.

@Dona Ferentes  Cutz is an options trader so I knew he'd know what itm means immediately. 

Read the latest OOO announcements. Betashares has rolled to the Sept contract (three months out). Within days the administrator (S&P) of the underlying index has now moved one month out. They're all scared of negative values when the June contract expires (two weeks time). They're rolling the problem down the road hoping it'll be OK in the future. 

I expect Trump to encourage every US citizen to fill up their cars with gas and go for a drive every week-end to MAGA.


----------



## InsvestoBoy (29 April 2020)

derangedlawyer said:


> _On 21st April futures price went in the negative xx$.. this ETF was trading at 4.24. Following day (22nd April) oil recouped in positive digits but OOO dropped to 2.6 which is a massive 39% drop in a day._
> 
> Please prove #3.




What you think was the "21st April futures price" that went negative and subsequently rebounded was the about-to-expire May 2020 contract.

OOO *was not holding the May 2020 contract at the time*. So what you think you saw on whatever chart you look at, and the underlying futures contract that OOO was holding at the time (June 2020) are not the same thing.

That same day, the June 2020 contract traded down from >$20 to $6.50 before bouncing. So what you saw in OOO was the result of mere price action in the June 2020 WTI contract.

On the other hand, if the price had tracked the price of May as so desperately wish, OOO would just be straight up bankrupt.


----------



## InsvestoBoy (29 April 2020)

aus_trader said:


> Well, I am not saying it doesn't have problems like contango which slowly eats away at it. But in the past I remember it behaved somewhat like other ETFs that track the underlying. So "OOO" will be up when POO is up and it'll be down when POO is down.




The narrower the spread between spot and the front month is, the more that it will appear as if OOO is "behaving somewhat", but that doesn't mean anything except that the spread is narrow. It doesn't mean that the spread can't widen, in either direction. It could go into deep backwardation and OOO might start outperforming what you see as POO.



> That relationship is broken at the moment, so that's the problem.




It's really not broken. OOO does not track the spot price of oil, no matter what you think. It holds the constituents of and tracks an oil futures index.


----------



## aus_trader (29 April 2020)

peter2 said:


> My US broker stopped allowing shorts on USO a while ago. I'll be interested to see if they'll allow it now the price is much higher.



That would be interesting to see, once the consolidation/reverse-split is complete. Keep us informed Peter 

Yes the 50min podcast posted by InsvestoBoy was really helpful to help us understand the mechanics of what was happening and what could continue to happen if the Oil demand doesn't go back up anytime soon...

Some good news for us Aussies:







https://www.abc.net.au/news/2020-04...crude-oil-purchase-teaches-economics/12185546
A nice video also on that article, further down.


----------



## cutz (29 April 2020)

@aus_trader 

Good evening, I just checked US oil, shorting is allowed with the uptick rule now removed.


----------



## aus_trader (30 April 2020)

cutz said:


> @aus_trader
> 
> Good evening, I just checked US oil, shorting is allowed with the uptick rule now removed.




Thanks cutz, I am up monitoring what the F this thing is up to. As usual: A massive underperformance by about 6:1 to Oil price.

Yes I know all that said about Futures contracts being swapped around and contango etc, but man o man an ETF that is supposed to track Oil price, this is screwed up !

Here's the Black Liquid itself (Used to be so valued/priced and even called Black Gold):





Here's the ETF: 





Gives little hope for asx: "OOO" to have a good recovery, even with a 27% odd price rise in Crude.


----------



## aus_trader (30 April 2020)

aus_trader said:


> Thanks cutz, I am up monitoring what the F this thing is up to. As usual: A massive underperformance by about 6:1 to Oil price.
> 
> Yes I know all that said about Futures contracts being swapped around and contango etc, but man o man an ETF that is supposed to track Oil price, this is screwed up !
> 
> ...




Well, it ("OOO") actually did better than it's US counterpart "USO", which was to my surprise:


----------



## cutz (30 April 2020)

Hello aus_trader

That's good news mate, I hope the runup continues, I notice spreads have also come off. Me personally been eyeing off an a US oil services company to add to my portfolio, I left a buy write in the market last night before going to bed but didn't get hit, stock closed on its high.


----------



## Smurf1976 (30 April 2020)

aus_trader said:


> Well, it ("OOO") actually did better than it's US counterpart "USO", which was to my surprise:



An approach that might have value would be for those so inclined to trade OOO as OOO.

That is trade it on the technicals of the OOO chart and completely ignore any idea about it having something to do with the oil price, just focus on OOO as OOO and ignore the oil bit.


----------



## aus_trader (30 April 2020)

Smurf1976 said:


> An approach that might have value would be for those so inclined to trade OOO as OOO.
> 
> That is trade it on the technicals of the OOO chart and completely ignore any idea about it having something to do with the oil price, just focus on OOO as OOO and ignore the oil bit.




Well, it's on that trajectory longer term. Today's up turn will be just a blip barely visible...


----------



## aus_trader (30 April 2020)

cutz said:


> Hello aus_trader
> 
> That's good news mate, I hope the runup continues, I notice spreads have also come off. Me personally been eyeing off an a US oil services company to add to my portfolio, I left a buy write in the market last night before going to bed but didn't get hit, stock closed on its high.




Well, at least you'll get to keep the premium if bottom is already in...


----------



## frugal.rock (23 May 2020)

Update.
So OOO has been behaving itself of late with quite a few impressive (for an etf) gap ups. 
It took a 5.6% hit today though. 

I wonder how long it will be before oil is above 60 usd per barrel again?
I would expect the etf to continue recovering as the scare wears off.
Meanwhile, back at the farm, production is or has been dropping.
Interesting weeks ahead for oil.
Can only hope OOO follows along.

F.Rock


----------



## qldfrog (23 May 2020)

frugal.rock said:


> Can only hope OOO follows along.



That is the issue,we have to hope that ooo behaves..so the reason i will avoid putting any substantial amount in, better go directly to oiler or drillers in my view..so US market
I doubt oil will be back much over $40 45 a barrel for long periods medium term as this would restart fracking in the US. Russia and the Saudis need to keep oil below $60.they will.
But that leaves still a nearly 50pc increase ahead to play with .not bad with the proper tools


----------



## aus_trader (24 May 2020)

qldfrog said:


> That is the issue,we have to hope that ooo behaves..so the reason i will avoid putting any substantial amount in, better go directly to oiler or drillers in my view..so US market
> I doubt oil will be back much over $40 45 a barrel for long periods medium term as this would restart fracking in the US. Russia and the Saudis need to keep oil below $60.they will.
> But that leaves still a nearly 50pc increase ahead to play with .not bad with the proper tools




I also stopped playing with "OOO". It has been caught pants down 

I think good quality oilers are my best tool for getting exposure to Oil, currently hold BPT in the "spec portfolio" and I may look to add others as oil price is heading back up.


----------



## frugal.rock (24 May 2020)

Smurf1976 said:


> An approach that might have value would be for those so inclined to trade OOO as OOO.
> 
> That is trade it on the technicals of the OOO chart and completely ignore any idea about it having something to do with the oil price, just focus on OOO as OOO and ignore the oil bit.



From what I have seen on the chart and the way it's traded of late, the shorter term trend has me holding.
If current pullback continues, am expecting a $3 level test, otherwise a $4+ run, with a bit of luck...

As for ignoring the oil part, hmmm, at your peril?
Have put in a request for the markets to put some attention on OOO. 
Note volume levels, picked up late March, peaked mid April, dropped off, now seemingly on the rise again, with the price thus far.


----------



## aus_trader (24 May 2020)

Good luck frugal.rock, hope the trades work out for you.

I have stopped looking at both local "OOO" and US "USO". I will only look at Oil spot price to see what the real market is doing rather than the ETF's.

Once the trust is lost and I figured out how these instruments are made up with futures contracts with contango issues, it made it clear to me that I am better off trading the local Oil stocks to get exposure to Oil price.


----------



## Chronos-Plutus (24 May 2020)

aus_trader said:


> I also stopped playing with "OOO". It has been caught pants down
> 
> I think good quality oilers are my best tool for getting exposure to Oil, currently hold BPT in the "spec portfolio" and I may look to add others as oil price is heading back up.




Yes I tend to think the same here, although recently I have considered taking a percentage of the stake that I was going to use to buy an oil stock and buy OOO. Maybe something like 60% oil stock to 40% OOO.

This OOO ETF annoys me a bit as I thought of an oil ETF back in late 2010, early 2011 before they launched it.

I also thought of other ETFs diamonds, artworks and racehorses back at that time.


----------



## beginnerinvestor (27 May 2020)

Does anyone know why when the WTI price drops, OOO follows, but when WTI rises, OOO hardly goes up?


----------



## Chronos-Plutus (27 May 2020)

beginnerinvestor said:


> Does anyone know why when the WTI price drops, OOO follows, but when WTI rises, OOO hardly goes up?
> 
> 
> View attachment 103846



OOO doesn't directly track the WTI, it tracks the S&P GSCI Crude Oil Index Excess Return. So you need to study this index to know how OOO performs. Also OOO is hedged to currency volatility.


----------



## beginnerinvestor (27 May 2020)

Can investors lose all their money or the fund would be closed if the OOO price goes to zero?

Or I could still have a zero balance at one point, and still hold the etf, but then wait for the OOO price to go back to eg $5 and then sell it?


----------



## aus_trader (28 May 2020)

beginnerinvestor said:


> Can investors lose all their money or the fund would be closed if the OOO price goes to zero?
> 
> Or I could still have a zero balance at one point, and still hold the etf, but then wait for the OOO price to go back to eg $5 and then sell it?




That's a very hard question to answer. You probably have to ask "Betashares", the fund manager itself to find out what happens in that case.

My best guess is "OOO" will still exist even in an $0 oil price environment and continue to erode any value in it. Then if and when the oil price goes back up it'll massively underperform which is why I have decided to play Oil price in better ways. And that way in my opinion, is to buy beaten down quality Oil stocks when the Oil price gets hammered or trades down to zero levels.

I don't want to directly recommend any Oil stocks since that would be giving investment advice. But if you wish to see which Oil stock I currently own and is showing profits with the Oil price rebound as well as my other stock holdings, see Speculative Stock Portfolio. It's not a 'buy and forever hold' portfolio but stocks generally gets traded over longer time periods (months/years).


----------



## beginnerinvestor (28 May 2020)

aus_trader said:


> That's a very hard question to answer. You probably have to ask "Betashares", the fund manager itself to find out what happens in that case.
> 
> My best guess is "OOO" will still exist even in an $0 oil price environment and continue to erode any value in it. Then if and when the oil price goes back up it'll massively underperform which is why I have decided to play Oil price in better ways. And that way in my opinion, is to buy beaten down quality Oil stocks when the Oil price gets hammered or trades down to zero levels.
> 
> I don't want to directly recommend any Oil stocks since that would be giving investment advice. But if you wish to see which Oil stock I currently own and is showing profits with the Oil price rebound as well as my other stock holdings, see Speculative Stock Portfolio. It's not a 'buy and forever hold' portfolio but stocks generally gets traded over longer time periods (months/years).






I got an email reply from them today

"If the Net Asset Value (NAV) of the fund were to reach $0.00, it is likely that the fund would be closed, and investors would lose all initial investment permanently."

Why do you think it will massively underperform?

The price of the etf was around $15 for most of last year, so I was thinking it could get to that level in 2-3 years.


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## aus_trader (29 May 2020)

beginnerinvestor said:


> I got an email reply from them today
> 
> "If the Net Asset Value (NAV) of the fund were to reach $0.00, it is likely that the fund would be closed, and investors would lose all initial investment permanently."
> 
> ...



Well there you go. You could lose the entire investment after all !

Both Aussie "OOO" and it's brother from another mother US "USO" will both underperform Crude Oil price. Both over longer periods of time as you are suggesting due to fees and futures contracts swaps and in the short term as we found out with Contango issues, I'll copy and paste what I posted earlier for your consideration:

Thanks cutz, I am up monitoring what the F this thing is up to. As usual: A massive underperformance by about 6:1 to Oil price.

Yes I know all that said about Futures contracts being swapped around and contango etc, but man o man an ETF that is supposed to track Oil price, this is screwed up !

Here's the Black Liquid itself (Used to be so valued/priced and even called Black Gold):





Here's the ETF: 





Gives little hope for asx: "OOO" to have a good recovery, even with a 27% odd price rise in Crude.


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## beginnerinvestor (29 May 2020)

aus_trader said:


> Well there you go. You could lose the entire investment after all !
> 
> Both Aussie "OOO" and it's brother from another mother US "USO" will both underperform Crude Oil price. Both over longer periods of time as you are suggesting due to fees and futures contracts swaps and in the short term as we found out with Contango issues, I'll copy and paste what I posted earlier for your consideration:
> 
> ...




What *Chronos-Plutus *said was OOO tracks GSCI, but not WTI, although I don't know why it wouldn't track the WTI.

Looking at my graph, it mostly tracks the GSCI, but for the last month hasn't risen as much.

I will need to research whether there is a realistic risk of it ever reaching a zero price, and decide if I wanna buy some or not.


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## frugal.rock (29 May 2020)

My thoughts are, I think the risk of it going to 0 is low, but not impossible, just like any stock.
As said somewhere above, consider the ETF as a regular stock for trading purposes. If oil goes up and the ETF goes up as well, happy days.
It does move around somewhat with the general market observations on a daily basis. 
Having said that, I have no idea about futures and 3 month contracts etc.


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## aus_trader (30 May 2020)

frugal.rock said:


> My thoughts are, I think the risk of it going to 0 is low, but not impossible, just like any stock.
> As said somewhere above, consider the ETF as a regular stock for trading purposes. If oil goes up and the ETF goes up as well, happy days.
> It does move around somewhat with the general market observations on a daily basis.
> Having said that, I have no idea about futures and 3 month contracts etc.




I think you are correct on this call FR !

If we look back there was an absolute avalanche of factors that all converged on the oil price to be decimated and to be pushed into -ve territory briefly:
- Plummeting demand due to lock down
- Surging supplies as even the high cost producers kept pumping as it was very costly to plug a well and re-start at a later date
- Tanker and Oil storage facilities were full that it was impossible to get rid of the Oil produced i.e. producers had to pay customers to take it off their hands, hence the brief dip into -ve territory
- Saudi-Russian tensions/deals to crush the Oil price which I think was a cunning plan to bankrupt the high cost US shale and Tar Sand Oil producers

As a side note, I think the attempt to crush the US Oil producers will get no attention at the moment as to what the US is currently dealing with virus deaths and now violence on streets:


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## aus_trader (30 May 2020)

So my view is the same, we are unlikely to see Oil head back down to zero or -ve territory. There will be volatility and pull backs as usual.

Only difference is I am getting exposure via Oil/Gas energy stocks rather than through the ETF.


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## frugal.rock (30 May 2020)

Not sure if ooo was paying a dividend previously? Something to consider if they don't pay a divvy when next due, if due.


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## aus_trader (30 May 2020)

frugal.rock said:


> Not sure if ooo was paying a dividend previously? Something to consider if they don't pay a divvy when next due, if due.




That's another thing I don't understand. When you are an ETF that emulates a commodity price such as a Gold Price ETF or Oil Price ETF, where is the Divided generated from ?

I understand for Stock ETFs the Fund manager can generate a dividend distribution as they collect all the dividends that the companies in that ETF pays and re-distributes as a lump sum to shareholders.

As far as Gold ETFs goes, I am not aware of a single one that pays a dividend because Gold doesn't have a yield. How can a Oil ETF generate one ? There is just too many unanswered questions with this ETF !


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## qldfrog (30 May 2020)

frugal.rock said:


> Not sure if ooo was paying a dividend previously? Something to consider if they don't pay a divvy when next due, if due.



Yes,there was a dividend attached


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## frugal.rock (30 May 2020)

Thanks Frog, wasn't sure.
So scenario's to consider then;
No dividend, 
Reduced dividend,
Increased dividend... haha?
Timing of one of above.


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## danthuluri (31 May 2020)

People are coming out of lockdowns. Businesses are starting and consumption will increase drastically. Personally i don' see any downside from here except a huge second wave of Coronavirus.


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## qldfrog (31 May 2020)

danthuluri said:


> People are coming out of lockdowns. Businesses are starting and consumption will increase drastically. Personally i don' see any downside from here except a huge second wave of Coronavirus.



As long as OOO is aligned to oil consumption and price...


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## aus_trader (31 May 2020)

danthuluri said:


> People are coming out of lockdowns. Businesses are starting and consumption will increase drastically. Personally i don' see any downside from here except a huge second wave of Coronavirus.



Agree based on the local perspective. I still see issues in the US situation that may impact on the economy therefore Oil and consumption.


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## frugal.rock (31 May 2020)

A bit of a summary.
USA.
Well counts dropping off. 
Production still slowing but possibly indicating a bottom soon. 
Data is laggy. Behind a week.
I don't have any doubts that the production tap can meet demand.
The demand tap isn't opening rapidly, the world needs to get out of covid19 restrictions.

I can understand the oil industry reducing supply to bring the poo up.
Recover some losses. 
Would it be stupid to expect poo hit $80 pb at some stage in the next 12 months?

F.Rock


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## qldfrog (31 May 2020)

frugal.rock said:


> A bit of a summary.
> USA.
> Well counts dropping off.
> Production still slowing but possibly indicating a bottom soon.
> ...



$60 max or wells will reopen is my view, and hovering around 40USD a barrel as a medium term let's see


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## Smurf1976 (31 May 2020)

frugal.rock said:


> Would it be stupid to expect poo hit $80 pb at some stage in the next 12 months?




An issue that's widely overlooked is that an oil well being economic versus uneconomic is more of a financial phenomenon than a geological one.

The Fed can't physically flood the market with oil but they could certainly prop up others to do so and we're living in an era when the seemingly impossible does indeed happen and usually with little if any warning.

Just 5 months ago to this day, the big concern in Australia was about the Sydney fireworks going ahead. Consider all that has happened since then, in a mere 5 months, and I don't think the idea that we see oil companies drilling and producing with no intent of making a profit is out of the question at all if there's some broader political or economic reasoning behind it.

In other words, I'm wary that central banks get involved and there's a complete disconnect between oil price versus any sort of fundamentals. I'm not convinced that will happen, but it seems that other markets have completely lost track of real world reality so why would oil keep following fundamentals?


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## aus_trader (31 May 2020)

Within a year may be too optimistic, but longer term I think so based on the money printing experiment continuing as Smurf1976 also mentioned which will inflate limited supply/real assets like Oil over the long term when measured/valued in terms of possibly unlimited supply of paper asset like $.


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## frugal.rock (31 May 2020)

The majority of/ all new wells for oil and gas are fracked.
The US actually became a net exporter end of last year. That's probably tipped back, but that's the point they're at with emphasis on increasing export.


----------



## aus_trader (31 May 2020)

frugal.rock said:


> The majority of/ all new wells for oil and gas are fracked.
> The US actually became a net exporter end of last year. That's probably tipped back, but that's the point they're at with emphasis on increasing export.




Problem I see for US is they won't make any profits if they are to sell their produced in Oil in their currency. They'll be lucky to get 50% of their money back on the $70+/barrel spent on production if sold on the open market.





They'll have to find another way to trade it e.g. in exchange for manufactured goods in China ?


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## qldfrog (31 May 2020)

frugal.rock said:


> The majority of/ all new wells for oil and gas are fracked.
> The US actually became a net exporter end of last year. That's probably tipped back, but that's the point they're at with emphasis on increasing export.



US Fracking is basically a conversion of paper$ onto oil
Standard oil is search and exploration, setup of infrastructure, exploitation
Whereas fracking is an endless rapid circle of drilling sell and drill again.
So capital capital capital
Few if any company are/were making money, at best they could pay interest


----------



## SnakeEyes26 (2 June 2020)

Can you hold OOO shares long term? If i buy OOO today, can i hold it for the next 5 years for example?


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## qldfrog (2 June 2020)

you could but realise even in POO going up, OOO could fall; these ETF are not done for long term or even medium term ownership; have a look at the GEAR thread for some understanding of the grinding effect the nature of these ETF leads to; I am no expert but definitively not a long term tool


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## jbocker (2 June 2020)

SnakeEyes26 said:


> Can you hold OOO shares long term? If i buy OOO today, can i hold it for the next 5 years for example?



I held shares OOO from Late Jan 2015 to mid Feb 2020. just over 5 years. I luckily got rid of them in Feb. Distributions over last couple of years was what was hoped for and a return to their original price ($50 range, which was prior to my purchase). Not a profitable investment  bought 200 at $23+ sold at $13+. My first ETF.


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## aus_trader (3 June 2020)

Agree with you guys @qldfrog/@jbocker, not a long term instrument. I can understand the attraction to the ETF than individual shares of Oil companies for example, but OOO is not a good tool to speculate on Oil price based on my real past experience also.


----------



## HelloU (3 June 2020)

(i have not read back so this comment may be way off or already said)
FUEL is an etf for the companies rather than the commodity.


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## qldfrog (3 June 2020)

HelloU said:


> (i have not read back so this comment may be way off or already said)
> FUEL is an etf for the companies rather than the commodity.



true and as such a slightly different but in my opinion better play on oil; But I also believe it is edged???so may be a plus, in my opinion a minus when aud is at 70c


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## aus_trader (3 June 2020)

qldfrog said:


> true and as such a slightly different but in my opinion better play on oil; But I also believe it is edged???so may be a plus, in my opinion a minus when aud is at 70c



Yes, currency hedged. But still this is an ETF that holds actual stocks rather than the Oil futures that has rollover problems which is the case with OOO.


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## qldfrog (3 June 2020)

aus_trader said:


> Yes, currency hedged. But still this is an ETF that holds actual stocks rather than the Oil futures that has rollover problems which is the case with OOO.



But are you not better off buying an equivalent, a la Duc, on the NYSE?
why do you edge an oil ETF with the AUD at 70c? Just in case it reaches 80c in 3 months?
Agree otherwise, FX excluded, I would prefer using FUEL to OOO by far


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## Smurf1976 (3 June 2020)

qldfrog said:


> why do you edge an oil ETF with the AUD at 70c? Just in case it reaches 80c in 3 months?



The logic would be if someone wanted exposure to the oil price only, without any exposure to currency movement.

If someone has a view on the oil price going up, but has no real knowledge or interest of currencies, then that would make sense.


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## aus_trader (4 June 2020)

qldfrog said:


> But are you not better off buying an equivalent, a la Duc, on the NYSE?




Yes, if the currency hedging was to be taken out of the equation. Something like NYSE listed 
Vanguard Energy ETF (VDE).


----------



## pavilion103 (7 June 2020)

Been following closely. 
I purchased $10,000 of the OOO ETF on the ASX @ 2.90 (as mentioned in another thread).
Now it's around 3.85 and should continue up on Monday following the WTI performance Friday night. 

Watched closely and saw the super contango disappear. 

With WTI at 39.55, I'm expecting some consolidation from here.

Will continue to monitor closely.


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## pavilion103 (7 June 2020)

The difference between July20 and Jan21 contract is only 90c.
A far cry from the super contango.


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## frugal.rock (7 June 2020)

pavilion103 said:


> Now it's around 3.85 and should continue up on Monday following the WTI performance Friday night.



I have it on good standing, that your prediction is DOOMED.
In fact, I will wager every cent I have on the matter.


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## aus_trader (8 June 2020)

frugal.rock said:


> In fact, I will wager every cent I have on the matter.



Don't do it, but I agree


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## frugal.rock (8 June 2020)

Too late.
Bets on! Guess we'll find out "soon" haha.

Enjoying your Public holiday anyone?


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## qldfrog (8 June 2020)

No


frugal.rock said:


> Too late.
> Bets on! Guess we'll find out "soon" haha.
> 
> Enjoying your Public holiday anyone?



 Test for the wicked here in qld


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## aus_trader (8 June 2020)

frugal.rock said:


> Too late.
> Bets on! Guess we'll find out "soon" haha.
> 
> Enjoying your Public holiday anyone?



Yeah, places open finally. Have to queue up but worth the meals and drinks !

Parks and reserves are packed, have to wait around just to get a BBQ and seating spot. I think everyone is glad to be out and about over the long weekend.


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## pavilion103 (8 June 2020)

frugal.rock said:


> I have it on good standing, that your prediction is DOOMED.
> In fact, I will wager every cent I have on the matter.




Well when you put it like that lol...

Care to elaborate?
You anticipating a storage issue?

Edit: hahaha the penny just dropped!!
Public Holiday 
Yes. I woke today thinking, I would look a bit silly on the ASF..

I guess you win the “wager”


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## frugal.rock (8 June 2020)

Drinks are on me...
Schooners, jug, pots, pints of crude for all !


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## pavilion103 (23 June 2020)

Over $4


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## frugal.rock (23 June 2020)

One could consider there's still plenty of overhead space for OOO.
ETF's are gaining popularity as they are generally considered as a more stable method of exposure.
Take out the the correlation between OOO and oil, looking at the TA side, what's the current trend?
Up. 
Oil correlation, I suspect, will show its hand, in its own time.
I don't hold, but am intending to once some equity becomes available.
F.Rock


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## frugal.rock (25 June 2020)

frugal.rock said:


> I've changed my opinion.
> If I traded oil, I'd be going short now faster than a rabbit down the hole... (rabbit down the hole is the gold safe haven analogy)
> Oil inventorys are peaking. Way over estimates. India is nearly chockers as is the US.
> Expecting US Weekly Production figure overnight, am expecting another big (bigger?) drop. Has to be.
> ...




https://www.aussiestockforums.com/threads/oil-price-discussion-and-analysis.797/page-133


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## frugal.rock (25 June 2020)

Ooooo, ouch.



frugal.rock said:


> Oh no, US weekly production for the week of 19/6/2020, apparently production went UP...! by 500
> to 11,000 (x 10,000)
> I think the figures are getting fudged!
> That just makes the "going short" conviction even stronger, in my opinion.
> ...


----------



## DoubleMD (11 November 2020)

G'day gents, long time reader but first time poster. I've got significant exposure to the oil futures market via OOO and oil equities via FUEL, having made a play in the medium-long term based on the oil price being as low as it is. 

Thought i'd share some significant research i've stumbled across by Goehring & Rozencwajg who run a commodities fund. A significant read but basically they see a shortfall in supply by the start of 2021. At $40 a barrel and significant upside, they make some significant points worth considering.

Cheers

DMD


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## tonyparis (15 February 2021)

ooo is getting slowly getting back to pre last crash levels.
Up 5% today


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## qldfrog (15 February 2021)

will take a while for people to forget what happened, will never invest in OOO  for more than a day now
But many have short memories and new entrants will be tomorrow's suckers


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## Smurf1976 (15 February 2021)

qldfrog said:


> will take a while for people to forget what happened, will never invest in OOO for more than a day now
> But many have short memories and new entrants will be tomorrow's suckers



I hold a small position in it but in doing so I'm consciously trading "OOO" as though it were just another random stock, I'm not thinking of it in terms of trading "crude oil" and using it as a means to effect that trade given the risk of a disconnect between the two.


----------



## qldfrog (15 February 2021)

Smurf1976 said:


> I hold a small position in it but in doing so I'm consciously trading "OOO" as though it were just another random stock, I'm not thinking of it in terms of trading "crude oil" and using it as a means to effect that trade given the risk of a disconnect between the two.



and disconnect is a weak word whenyou remember what happened


----------



## Smurf1976 (16 February 2021)

qldfrog said:


> and disconnect is a weak word whenyou remember what happened



Indeed - I see my position as an "OOO trade" not an "oil trade" if that makes sense.

It's in the "speculative" category but it has been profitable thus far so I'm not complaining.


----------



## wabullfrog (26 April 2021)

Announcement just released.


Next 3 months will see distributions paid on the "substantial gains"



> The Fund provides investment exposure to the performance of WTI crude oil futures, aiming to track the performance of the
> S&P GSCI Crude Oil Index Excess Return hedged into Australian dollars, before fees and expenses. The prices of WTI
> crude oil futures have increased significantly over the course of the financial year to date. As a result, as at the date of this
> announcement the Fund has realised substantial gains, which would be required to be distributed by the 30 June 2021
> ...





Last report is the half year to December 2020 income as








Will be interesting to see what the April distribution announcement is.

Link to the announcements below









						Crude Oil Index ETF - Currency Hedged (Synthetic)
					

BetaShares Crude Oil ETF - provide investors with a simple way to take a view on oil prices. Access in a single trade, diversify your portfolio.




					www.betashares.com.au


----------



## frugal.rock (29 April 2021)

Just a heads up that today is the last day to buy to get the April lucky door prize.
Record date is Tuesday 4th May.
There will be a May and June payment also apparently.

Trying to get my head around things. Bear with me.

So theres a after management costs* profit of $39,345,000* for *half yea*r up to *end of Dec 2020* and no dividend was paid thus far.
Around *41,096,759 units* outstanding. 
41096759/39345000=* $0.957 per share using this method. *
Spread over 3 months is around $0.32 per share for 3 months, not including March quarter (unsure if anything will be included from this quarter?)

Still waiting for end of March quarter 2021results, but the dividend payments intention announcement has been released before March quarter results released. No figures given yet.

Is the above scenario a fair guestimation or am I getting it all wrong?
Can anyone who understands the whole WTI futures contracts thing in relation to OOO making profit, have a stab at a likely outcome for the March quarter based off WTI contracts prices?

Cheers.


----------



## wabullfrog (29 April 2021)

@frugal.rock amount for April is $0.34141467. If it works out to be around $1 in total those that bought at or near the bottom with very happy. Will be interesting to see if this moves the price beyond the normal fluctuations directly related to crude oil futures.















						Crude Oil Index ETF - Currency Hedged (Synthetic)
					

BetaShares Crude Oil ETF - provide investors with a simple way to take a view on oil prices. Access in a single trade, diversify your portfolio.




					www.betashares.com.au


----------



## frugal.rock (29 April 2021)

Any ideas about who the "registrar" is?  Computershare?
Not sure where that info is usually found. Haven't happened across it. Cheers.


----------



## wabullfrog (29 April 2021)

@frugal.rock Link Market Services is where mine are.


----------



## frugal.rock (27 May 2021)

wabullfrog said:


> @frugal.rock Link Market Services is where mine are.



Thanks bullfrog.

Need to enter BETA as the issuer though, not OOO.
Took a phone call to work that out...

Heads up, again.
Tomorrow (Friday) last day for purchasing to receive the May distribution.

I note Deloitte (2nd hand info) has oil tipped to reach $80 by year's end.
Sounds about right, IMO.

Any thoughts @Smurf1976 ? being the resident black gold expert!


----------



## frugal.rock (28 May 2021)

Last purchase to get May divvy.
Oil up overnight, will expect OOO SP to head up a bit today.
Last reported US crude inventories were down on expectations. (Bullish sign)


----------



## frugal.rock (31 May 2021)

My apologies.

TODAY is actually the last day to purchase to receive the May distribution.
Anticipated to be similar to April's figure of around $0.34.... which represents another payment of over 5% of current share price.

I anticipate June to be similar, however, let's remember that these payments are only referencing July through December 2020 profits.

I am wondering if perhaps the June payment may include any Jan-Mar 2021 profits if any, and in fact may poyentially be a bigger one. Probably wishful thonking and is speculation only. 

I am still hoping someone who has an understanding of futures contracts might assist with potential profits for the first 3 or 6 months of this year.
Anyone?


----------



## wabullfrog (31 May 2021)

The next distribution amount has been released & is $ 0.42806552









						Crude Oil Index ETF - Currency Hedged (Synthetic)
					

BetaShares Crude Oil ETF - provide investors with a simple way to take a view on oil prices. Access in a single trade, diversify your portfolio.




					www.betashares.com.au


----------



## frugal.rock (31 May 2021)

wabullfrog said:


> The next distribution amount has been released & is $ 0.42806552



Noice.
Their getting bigger... giddy up.
That represents a huge 7% of closing price today...
 And we still have June to go and OPEC is controlling supply nicely.
👌 🤸


----------



## frugal.rock (1 June 2021)

Not holding my breath that OOO won't dump down again like it did after the April dividend record date, but it hasn't so far today.

Gives me some hope of a longer term SP recovery to at least similar prepandemic prices.

I have speculated that at some stage the inelasticity of bringing back supply will be dominated by demand leading to a slow surge in oil prices.  More research needed.
Theres pro' and cons for the argument, but I expect the oil industry will have at least a few more hurrahs over the years before succumbing to the inevitable EV market.
I envisage that at some stage the POO (price of oil) will have to get rather high to push markets to transition over to EV's in combination with regulatory pressures.

10 year chart showing there's still plenty of overhead space to recover to near prepandemic levels






3 month chart.
The blip from dividend scalpers at the end of April disappears into the noise of general price volatility. (Seen around 3 May)


----------



## wabullfrog (1 June 2021)

I was also a bit surprised it didn't repeat last months drop but I'm not complaining. Crude WTI has just risen to above $68 for the first time in a while.


----------



## frugal.rock (1 June 2021)

wabullfrog said:


> Crude WTI has just risen to above $68 for the first time in a while.



Have also been keeping a keen eye on prices.  Despite high prices at the bowser, I am willing it higher.... a bread and butter trade thus far.

There was a small quick spike down (see chart) seen on 3 minute bars, any longer time frame shows it as a bullish/ green bar, so it was a quickie only by a select few.
From herein, a sell down will probably coincide with a pullback on the POO.... IMO only.










POO currently up over the last 24 hours (WTI) 3.5% at $68.67 and still climbing sharply (for oil anyway). Currently wondering about immediate causation?

Hoping gains will hold overnight, and then some.

Might be a spike up in anticipation of Iran export sanctions possibly being lifted as part of new uranium deal negotiations, that would bring prices back somewhat.
A wait and see job on how much clout OPEC has I think.


----------



## qldfrog (2 June 2021)

good entry today at $5.76


----------



## frugal.rock (2 June 2021)

I bought some more also.
5.77


----------



## frugal.rock (30 June 2021)

So, the 3rd dividend / distribution payment for 2020 July thru December profits, is  $0.38372305 (estimated) which makes the total of the 3 payments in the approximate vicinity of $1.13

This period (July to Dec 2020) saw the poo rise around 20% from $40 to $50 per barrel (WTI)

Current period of Jan to Jun 2021 has seen poo rise from $50 to over $70 per barrel... let's call it $70 neat.
This represents a  (over) 40% increase in poo.

The 20% rise saw a ~$1.13 in  profit distributions.
Is it fair to say that a 40%+ rise may see a distribution in the order of 2x $1.13 ? or a total of $2.16...🚀🚀🚀

Whilst I'm not sure if that's a great way to work out the potential profits distribution that may get paid in October (for Jan to June this year), I think it's probably a reasonable way...

If you hang on long enough @Gunnerguy with distribution payments like this and the poo still set to rise before world equilibriums are once again reached, you may just see a substantial claw back of capital.

It's very much a wait and see molasses trickle trade, however it's not hard to keep tabs on the indicators, ie; poo, stockpiles, consumption, OPEC and Iran.
Oh, and pandemic recovery figures not forgetting how this scenario has evolved in the first place.

From what I see, this event has been the biggest single oil price shock the world has seen. 
Whilst OPEC has their finger on the pulse more than ever before, I still don't see an oversupply situation occuring again any time soon, although that is based on the pandemic slowly ebbing away.

The scalpers will be out in force tomorrow morning, however, I will be holding until I see world equilibriums balance out which should be easily seen in the indicators.
If poo gets back to near ~$65 anytime soon from OPEC or Iran news, I am seeing that as a good buy the dip point.

My 2 cent musings...


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## Gunnerguy (30 June 2021)

Ur


frugal.rock said:


> So, the 3rd dividend / distribution payment for 2020 July thru December profits, is  $0.38372305 (estimated) which makes the total of the 3 payments in the approximate vicinity of $1.13
> 
> This period (July to Dec 2020) saw the poo rise around 20% from $40 to $50 per barrel (WTI)
> 
> ...



Yes good stuff.
Holding on to OOO.

Gunnerguy


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## frugal.rock (3 September 2021)

frugal.rock said:


> So, the 3rd dividend / distribution payment for 2020 July thru December profits, is $0.38372305 (estimated) which makes the total of the 3 payments in the approximate vicinity of $1.13
> 
> This period (July to Dec 2020) saw the poo rise around 20% from $40 to $50 per barrel (WTI)
> 
> ...



I seem to remember that September was the month I wanted in again to catch the hopefully large divvy/ distribution payment.
Am positioned now, so fingers crossed.
What could go wrong? 😬🙈


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## divs4ever (3 September 2021)

in oil ???

 after that negative spot price a while back 

 maybe even an alien fleet popping in for a top-up  might be possible 

 good luck 

( i hold some oil-producer stocks , so i don't hate oil , just the games played around it )


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## frugal.rock (15 September 2021)

US Weekly Oil stockpiles and related data out late tonight at 12:30
Expecting to see that supply hasn't fully recovered from hurricane Ida damage.
Actual fuels will be interesting as refineries came back online after power outage delays.
Hoping oil price gets a wriggle on towards the EOM and fingers crossed for  FY21 reporting (also end of month) distribution announcement.
Not sure what the r record highest divvy or distribution is on stocks or ETF's, but am expecting it to be an absolute cracker.
See previous posts here and in "Oil price analysis" thread if interested or more recommended to do your own research.

WTI futures chart, daily.







OOO chart, daily.


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## frugal.rock (30 September 2021)

OOO annual report now available as of 6pm today.

As expected, profit reported for FY shows the second half profits more than doubling first half.

Basic calcs indicate a total distribution of around $2.40 per share. It would be great if someone else also did independent calcs and confirmed that figure....

OOO closed at $5.99 today.
If ~$2.40 per share is correct, that's a 40% distribution payment.  🤫😌
That must break a bunch of records, not just for ETF's, but stocks also.

Only on ASF.


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## qldfrog (1 October 2021)

frugal.rock said:


> OOO annual report now available as of 6pm today.
> 
> As expected, profit reported for FY shows the second half profits more than doubling first half.
> 
> ...



I had just bought a decent packet good news..was not even aware of planned release.thanks for your work.will look at release content asap


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## qldfrog (1 October 2021)

Was coming here to add this link:
Gas price not oil but there is a link
https://finance.yahoo.com/news/traders-aim-40-u-natural-151211508.html


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## frugal.rock (1 October 2021)

frugal.rock said:


> Basic calcs indicate a total distribution of around $2.40 per share.



Have checked and I appear to have used an incorrect figure of SOI.
*New distribution calc around $2.26 or 37.7%*
Anyway, the Estimated Distribution announcement should be out today, maybe after trading ends, otherwise Monday.


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## frugal.rock (1 October 2021)

qldfrog said:


> I had just bought a decent packet



Your timing was good imo.
I also added to the holding yesterday morning.

Once the market gets over its negative smashing open, am expecting a bit of a flurry (although the market might want to see the distribution in writing)... the SP is slightly diverging from the POO, no volumes yet.
Still an early bird opportunity imo.

Good luck with it Mr Frog, although luck shouldn't be needed on this. 😉

It's worth noting, Betashares may decide to spread the distribution over more than one payment, as they did mid year.


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## qldfrog (5 October 2021)

frugal.rock said:


> Your timing was good imo.
> I also added to the holding yesterday morning.
> 
> Once the market gets over its negative smashing open, am expecting a bit of a flurry (although the market might want to see the distribution in writing)... the SP is slightly diverging from the POO, no volumes yet.
> ...



6.23 or +2.5% today...good


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## wabullfrog (5 October 2021)

@frugal.rock Betashares has already released the distribution announcements for the period ending 30 Sept 2021. See the link to A200 for further information.









						Australia 200 ETF
					

A200 aims to track the performance of an index that provides exposure to the largest 200 companies listed on the ASX, with management fee of only 0.07% p.a.




					www.betashares.com.au
				




OOO is not mentioned in the announcements so unless it is an omission, I presume there is no distribution. I have emailed them regarding this.


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## over9k (5 October 2021)

frugal.rock said:


> OOO annual report now available as of 6pm today.
> 
> As expected, profit reported for FY shows the second half profits more than doubling first half.
> 
> ...



Nah betashares do this kind of thing. I got stung when about 40% of LNAS was paid out at tax time when they even had a divvy reinvestment option. 

I've made a habit of checking now.


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## frugal.rock (6 October 2021)

I note there was a change of custodian and administrator of this fund around 20th Sept, together with another 25? or so funds.

Any expectations of timing of announcements has been speculation from previous year announcement timings.

I believe there are other beta funds that haven't yet made distribution announcements either, where one would expect a distribution.

For OOO ETF, with 2nd half FY21 profits being over double 1st half, one could be fairly confident that there *will* be a distribution announcement, timing of it is a different story.


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## qldfrog (6 October 2021)

frugal.rock said:


> I note there was a change of custodian and administrator of this fund around 20th Sept, together with another 25? or so funds.
> 
> Any expectations of timing of announcements has been speculation from previous year announcement timings.
> 
> ...



Unless profits snatched by new owners?


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## KevinBB (6 October 2021)

An ETF is, essentially, a trust. So, the distribution you receive as cash can, and often is, quite different from the distribution that is taxable in the unitholder's hands. It is the same for all most trusts, whether they be ETFs, listed property trusts, the trust portion of  or the private trusts that many here would use to hold their shareholdings.

For OOO, the year profit recorded in the financial statements ($139.329m) will be taxable in the hands of ETF unit holders, adjusted for things such as prior year losses and other non taxable income or expense. The distribution payable figure on the Balance Sheet ($15.348m) is the distribution with the ex date in early June. The Distributions to Unitholders figure of $46.86m is the total distributions made during the 2021 financial year, including the June 2021 distribution which as at 30 June 2021 was unpaid.

I stand to be corrected on the above, but this is my understanding of how the trust system works. Hope this clarifies things a bit.

KH


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## over9k (6 October 2021)

KevinBB said:


> An ETF is, essentially, a trust. So, the distribution you receive as cash can, and often is, quite different from the distribution that is taxable in the unitholder's hands. It is the same for all most trusts, whether they be ETFs, listed property trusts, the trust portion of  or the private trusts that many here would use to hold their shareholdings.
> 
> For OOO, the year profit recorded in the financial statements ($139.329m) will be taxable in the hands of ETF unit holders, adjusted for things such as prior year losses and other non taxable income or expense. The distribution payable figure on the Balance Sheet ($15.348m) is the distribution with the ex date in early June. The Distributions to Unitholders figure of $46.86m is the total distributions made during the 2021 financial year, including the June 2021 distribution which as at 30 June 2021 was unpaid.
> 
> ...



Nah you're right. It wasn't a divvy per se, it was a return of shareholder equity or something like that (I can't remember the specifics).


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## KevinBB (6 October 2021)

KevinBB said:


> The distribution payable figure on the Balance Sheet ($15.348m) is the distribution with the ex date in early June.



Can't edit the original post .... but this should read ... ex date on 1 July 2021.


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## frugal.rock (6 October 2021)

Total FY profit.
$139,329,000
Profit already paid (as 3 x distributions mid year)
$46,860,000

Difference (Remaining profit)
$92,469,000

41,161,002 units (shares) on issue (August 2021)

$92,469,000 / 41,161,002 units
= $2.2465196546964 estimated remaining FY distribution per unit

Current share price $6.23
(closing price 5/10/21)


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## qldfrog (6 October 2021)

frugal.rock said:


> Total FY profit.
> $139,329,000
> Profit already paid (as 3 x distributions mid year)
> $46,860,000
> ...



In any case, oil up and inflation are here so ooo even wo distribution probably not a bad bet..so my entries.so far so good..real issue is do you put a SL on such a volatile share, and if so how much for a medium term hold


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## frugal.rock (6 October 2021)

September units on offer disclosure announcement out.
39,661,002



frugal.rock said:


> $92,469,000 / 41,161,002 units
> = $2.2465196546964 estimated remaining FY distribution per unit



= $2.3314842121235

Using the updated units (Sept) figure.
That's my final guesstimate.


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## wabullfrog (6 October 2021)

Have asked Betashares about the Distribution, a couple of excerpts from email below.




> The BetaShares Operations Team is currently looking into making OOO distribution information and content consistent.
> 
> ....
> 
> ...


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## frugal.rock (6 October 2021)

So are you still thinking there won't be a distribution?

Nothing in your email excerpts indicate that there won't be.


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## wabullfrog (6 October 2021)

frugal.rock said:


> So are you still thinking there won't be a distribution?
> 
> Nothing in your email excerpts indicate that there won't be.




Last part of the quoted text in my previous post indicates to me that I would not be expecting a Distribution paid this month. Perhaps they will do something like they did in April this year where the Distribution Announcement was separate to the normal Quarterly Announcements. 

Seems like they are just making it up as they go...


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## frugal.rock (6 October 2021)

You seem to be getting confused re timing quarterlies or annual announcements etc.?

Other funds may have made a quarterly announcement in the last few days. (Irrelevant here, not talking about a quarterly distribution or result)

I've been discussing results from the annual report.

Distributions (as implied by profits tabled) and announcements of such, shouldn't get confused with quarterlys.

Annual report.
Distributions made for first 6 months of FY profit.
Waiting on distributions for 2nd half of FY year profits.

The distribution information "consistency" issue is probably around being stated quarterly, semi annualy or annually.
I  believe it used to be annually or semi annualy. 
I believe somewhere they stuffed up (in the last 12 months) and tabled as quarterly?, a copy paste error I believe...


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## Miner (13 December 2021)

I was intrigued by @Ann 's new thread and selection of OOO and earlier postings on this thread.
Noticed the comparative position - putting OOO on my watch list. DNH
From geopolitical perspective with Iran vs Israel and late's effort in courting Arab world and UAE, hopefully there would be some bump on oil prices. Currently fuel bowsers are running very low.


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## Ann (6 February 2022)

Smurf1976 said:


> An approach that might have value would be for those so inclined to trade OOO as OOO.
> 
> That is trade it on the technicals of the OOO chart and completely ignore any idea about it having something to do with the oil price, just focus on OOO as OOO and ignore the oil bit.



I truly should have read this earlier Smurf.

I just sold this, fool that I am. I was using MACD and RSI and the POO chart. Look at the remaining indicators, they are fine. Look at the chart, just jumped above its sideways channel resistance line. MACD and RSI, are now gone from my charts!


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## pavilion103 (9 March 2022)

Bought at $2.90 low.
Still holding 🙂


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