What an Oil ETF Has to Do With Plunging Oil Prices

What an Oil ETF Has to Do With Plunging Oil Prices

Oil Fund, or USO -- have contributed to market mayhem and helped push crude prices below zero.. Investors piled in during March and April, convinced that oil prices that had been falling -- pushed down by a price war between Saudi Arabia and Russia that boosted production just as demand was slashed by pandemic-driven lockdowns -- would eventually recover once economies reopened.. Unlike shares that can be held as long as an investor chooses, oil futures have finite terms and are agreements to buy or sell a physical product.. With USO holding a significant level of June contracts, there are concerns that prices will go negative again and that the whole process might repeat -- or might be worse, if the April 20th debacle scares off more investors.. Until the new shares are cleared for issuance, the ETF will not purchase more futures contracts, according to analysts, potentially adding to pressure on crude prices.. USO is hardly the only exchange-traded fund to be hammered by the swings in oil futures; the effects were felt around the globe..