Friday, February 6, 2009

Are April WTI Crude Futures Going to Skyrocket Today

Curious note: the US Oil Fund, which is an ETF, holds 20% of the outstanding March futures contracts, and these have to roll by the end of NYMEX trading today from March to April. The ETF holds 81,050 March contracts as of February 5 according to its website, which is 4x the amount it held in December. It is possible that the 1-2nd months contango could exhibit some very odd behavior today as USO rolls. The only way the contango won't explode is if there are buyers on the other side of the trade. Although with recent rampant rumors about GS selling vol into the commodity market and other comparable trickeries, we fully expect some fireworks before market close.

Bloomberg link pending Sphere: Related Content
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Anonymous said...

If USO holds 81,050 March contracts, and they roll them over to April, what about the sellers of those contracts? Do they all intend to deliver oil to Cushing? I bet most of them will roll over to April. But there may be some fireworks in the process.

Anonymous said...

What I don't understand, is why today?

March contracts can be traded until Feb 20th, correct?

Why is 02/06 significant?

Tyler Durden said...

today is the USO roll date

Anonymous said...

When there is contango, will shares of USO always decrease on the rollover dates then as they are converting to higher priced contracts?