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

[frugal.rock]

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

 

[Smurf1976]

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.

 

[Smurf1976]

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.

 

[frugal.rock]

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?

 

[cutz]

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 .

 

[aus_trader]

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

 

[Smurf1976]

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.

 

[aus_trader]

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

 

[Smurf1976]

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.

 

[qldfrog]

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

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]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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