USO ETF Sees Surge in Trading Amid Oil Price Fluctuations

Eric Balchunas, senior ETF Analyst at Bloomberg Intelligence, posted on X that the United States Oil Fund (USO), a 20-year-old oil exchange-traded fund, has become the sixth most traded ETF today. This week alone, it has reached a record trading volume of $17 billion. Since the recent strike in Iran, USO has seen a 28% increase, compared to a 9% rise for UNL and a 1% increase for XLE. Year-to-date, USO has surged by 52%. The fund has reverted to holding front-month futures, which are highly sensitive to changes in oil prices. This marks a shift from its previous strategy of holding futures across the entire curve, a change initially made when futures prices turned negative. The return to front-month futures indicates a strategic move to capitalize on current oil price dynamics.