@jeffero No. Backwardation (mostly) happens in a falling market, contango mostly happens in rising market. To get to $15 OOO would need a rising oil price market not a falling market. So contango, within reason, is (generally) your friend with regards to OOO gains.
Given the current fund structure for OOO, to get to $15 would require a WTI 3 month out Oil Futures price well over $100 per barrel. In my view, thats not happening in a hurry. My opinion is that a best case scenario in the next few months for OOO is in the $5 range, and would ‘roughly’ equate to a WTI Futures Oil Price around $50. The downside risk for OOO in the next 3 months relates to reopening pace (watch Google/Apple data closely for a progress guide), and oil production volumes (Bloomberg/Reuters publish regular updates). My view, at the moment, is that the OOO downside risk is less than the upside potential. But my advice to any prospective investor in this ETF is know what your investing in and pay close attention to your investment; it’s not set and forget.
OOO Price at posting:
$19.36 Sentiment: Buy Disclosure: Held
