BNO: A Convenient Way To Play Resurgent Brent

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BNO: A Convenient Way To Play Resurgent Brent

seekingalpha03-19

Investing in Brent crude oil provides exposure to the energy sector without investing in individual oil companies.United States Brent Oil Fund offers investors a way to gain exposure to Brent crude ...

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Saun
·05-29
Is this the time to go into oil? As opec+ decision may be round the corner to cut production
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The investment case for Brent crude oil in particular, a major trading classification of sweet light crude oil, primarily hinges on its status as a benchmark for global oil prices, reflecting the health of worldwide energy demand. It is extracted from the North Sea and serves as a reference price for buyers in Western Europe, Africa, and the Middle East. Investing in Brent crude allows investors to gain exposure to the energy sector without investing in the equities of individual oil companies. The demand for oil is influenced by various factors such as geopolitical tensions, OPEC+ decisions, the global economic climate, and advancements in energy technologies. While the transition towards renewable energy sources presents a long-term challenge, the enduring need for fossil fuels in transportation, industry, and as feedstock for petrochemicals underpins the investment case for Brent crude. Moreover, its price volatility provides opportunities for traders to profit from price swings, although it also adds an element of risk. Investing in Brent crude oil, however, isn't easy. Thankfully, there are ETFs that can get you access, even if imperfect, to Oil price movement. The United States Brent Oil Fund (NYSEARCA:BNO) offers investors an effective means to gain exposure to Brent crude oil. Managed by The United States Commodity Funds (USCF), BNO is an exchange-traded security designed to track the daily price movements of Brent crude oil through futures contracts. Understanding BNO's Structure And Holdings BNO's structure is somewhat unique. It invests primarily in listed crude oil futures contracts and other oil-related futures contracts. The investments are collateralized by cash, cash equivalents, and U.S. government obligations with remaining maturities of two years or less. The structure of BNO allows it to offer commodity exposure without the need for investors to establish a commodity futures account. This makes it a practical option for those seeking exposure to oil prices but does not have the expertise, funds, or desire to directly trade futures. The fund is essentially continuously rolling into the near-term futures contracts through the ETF structure. uscfinvestments.com Comparing BNO With Similar ETFs When compared with similar ETFs that also focus on crude oil, BNO exhibits certain distinct characteristics. Two such comparable ETFs are the United States Oil Fund, LP (USO) and the ProShares K-1 Free Crude Oil Strategy ETF (OILK). USO is designed to track the daily price movements of West Texas Intermediate light, sweet crude oil. However, due to the differences in the benchmarks they track (WTI for USO, Brent for BNO), the performance of these two funds can diverge based on the spread between WTI and Brent crude oil prices. OILK, on the other hand, seeks to provide total return through actively managed exposure to the West Texas Intermediate crude oil futures markets, but without the need for a K-1 tax form. This makes OILK a potentially more tax-efficient investment compared to BNO and USO for individual investors. The spread between West Texas Intermediate crude oil and Brent crude oil primarily reflects differences in oil quality, geopolitical risk, and transportation costs. WTI, sourced from U.S. oil fields, is slightly lighter and sweeter than Brent, making it marginally easier to refine, which sometimes commands a premium. However, Brent typically trades at a higher price due to its broader geographic accessibility and being a seaborne crude, which makes it available to a wider range of markets. BNO has done considerably better over the last several years relative to WTI. This makes sense given supply being more volatile outside the US due to the Russia/Ukraine war and other dynamics. stockcharts.com The Pros And Cons Of Investing In BNO Like any investment, there are potential advantages and drawbacks to consider when investing in BNO. Here are some key points to ponder: Pros:  Direct Exposure to Oil Prices: BNO provides exposure to Brent crude oil prices through futures, making it an effective tool for investors looking to hedge against or speculate on oil price movements. Ease of Trading: As an ETF, BNO shares can be bought and sold on the NYSE Arca during market hours, just like stocks. This provides high liquidity and ease of trading compared to other investment vehicles like futures contracts. No Need for a Futures Account: BNO offers commodity exposure without the need for a commodity futures account, which can be complex and costly to maintain.  Cons:  High Volatility: Like all commodities, oil prices can be highly volatile. This volatility can lead to substantial price swings in BNO's share price. Geopolitical Risks: Oil prices, and therefore BNO's performance, can be significantly affected by geopolitical events, such as conflicts in oil-producing regions. Roll Yield: BNO invests in futures contracts, which need to be rolled over as they expire. If the future contracts it buys are more expensive than the ones it sells (a situation known as contango), this could negatively impact the fund's returns.  Making An Investment Decision  Investing in the United States Brent Oil Fund can provide a unique opportunity to gain exposure to Brent crude oil prices. This ETF is best suited for investors who understand the risks associated with commodity investing, have a high risk tolerance, and are looking for a hedge against oil price volatility or a speculative play on oil price movements.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":311059407663264,"gmtCreate":1716947764445,"gmtModify":1716947768543,"author":{"id":"4096788696940590","authorId":"4096788696940590","name":"Saun","avatar":"https://static.tigerbbs.com/5460605f8510ded6a3dd26ec0e0b988f","vip":1,"crmLevel":4,"crmLevelSwitch":1,"authorIdStr":"4096788696940590","idStr":"4096788696940590"},"htmlText":"Is this the time to go into oil? As opec+ decision may be round the corner to cut production&nbsp;","listText":"Is this the time to go into oil? As opec+ decision may be round the corner to cut production&nbsp;","text":"Is this the time to go into oil? As opec+ decision may be round the corner to cut production","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/311059407663264","repostId":2420724725,"repostType":2,"repost":{"id":"2420724725","pubTimestamp":1710847680,"share":"https://ttm.financial/m/news/2420724725?lang=&edition=fundamental","pubTime":"2024-03-19 19:28","market":"hk","language":"en","title":"BNO: A Convenient Way To Play Resurgent Brent","url":"https://stock-news.laohu8.com/highlight/detail?id=2420724725","media":"seekingalpha","summary":"Investing in Brent crude oil provides exposure to the energy sector without investing in individual oil companies.United States Brent Oil Fund offers investors a way to gain exposure to Brent crude oi","content":"<html><body><ul><li>Investing in Brent crude oil provides exposure to the energy sector without investing in individual oil companies.</li><li>United States Brent Oil Fund offers investors a way to gain exposure to Brent crude oil through futures contracts.</li><li>BNO has distinct characteristics compared to similar ETFs, such as the United States Oil Fund and the ProShares K-1 Free Crude Oil Strategy ETF.</li></ul><p><figure><picture><img height=\"1024px\" loading=\"lazy\" sizes=\"(max-width: 768px) calc(100vw - 36px), (max-width: 1024px) calc(100vw - 132px), (max-width: 1200px) calc(66.6vw - 72px), 600px\" src=\"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1452806002/image_1452806002.jpg?io=getty-c-w750\" srcset=\"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1452806002/image_1452806002.jpg?io=getty-c-w1536 1536w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1452806002/image_1452806002.jpg?io=getty-c-w1280 1280w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1452806002/image_1452806002.jpg?io=getty-c-w1080 1080w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1452806002/image_1452806002.jpg?io=getty-c-w750 750w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1452806002/image_1452806002.jpg?io=getty-c-w640 640w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1452806002/image_1452806002.jpg?io=getty-c-w480 480w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1452806002/image_1452806002.jpg?io=getty-c-w320 320w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1452806002/image_1452806002.jpg?io=getty-c-w240 240w\" width=\"1536px\"/></picture><figcaption><p>Jeremy Poland</p></figcaption></figure></p> <p>Oil is looking more and more interesting here as inflation seems to be picking up again and with a US economy that still is showing overall strength. The investment case for Brent crude oil in particular, a major trading classification<span> of sweet light crude oil, primarily hinges on its status as a benchmark for global oil prices, reflecting the health of worldwide energy demand. It is extracted from the North Sea and serves as a reference price for buyers in Western Europe, Africa, and the Middle East. Investing in Brent crude allows investors to gain exposure to the energy sector without investing in the equities of individual oil companies.</span></p> <p>The demand for oil is influenced by various factors such as geopolitical tensions, OPEC+ decisions, the global economic climate, and advancements in energy technologies. While the transition towards renewable energy sources presents a long-term<span> challenge, the enduring need for fossil fuels in transportation, industry, and as feedstock for petrochemicals underpins the investment case for Brent crude. Moreover, its price volatility provides opportunities for traders to profit from price swings, although it also adds an element of risk.</span></p> <p>Investing in Brent crude oil, however, isn't easy. Thankfully, there are ETFs that can get you access, even if imperfect, to Oil price movement. The United States Brent Oil Fund (<span>NYSEARCA:BNO</span>) offers investors an effective means to gain exposure to Brent crude oil. Managed by The United States Commodity Funds (USCF), BNO is an exchange-traded security designed to track the daily price movements of Brent crude oil through futures contracts.</p> <h2>Understanding BNO's Structure And Holdings</h2> <p>BNO's structure is somewhat unique. It invests primarily in listed crude oil futures contracts and other oil-related futures contracts. The investments are collateralized by cash, cash equivalents, and U.S. government obligations with remaining maturities of two years or less. The structure of BNO allows it to offer commodity exposure without the need for investors to establish a commodity futures account. This makes it a practical option for those seeking exposure to oil prices but does not have the expertise, funds, or desire to directly trade futures.</p> <p>The fund is essentially continuously rolling into the near-term futures contracts through the ETF structure.</p> <p><figure contenteditable=\"false\"><span><img contenteditable=\"false\" loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2024/3/17/39580-1710713526845596.png\"/></span><figcaption><p>uscfinvestments.com</p></figcaption></figure></p> <h2>Comparing BNO With Similar ETFs</h2> <p>When compared with similar ETFs that also focus on crude oil, BNO exhibits certain distinct characteristics. Two such comparable ETFs are the United States Oil Fund, LP (USO) and the ProShares K-1 Free Crude Oil Strategy ETF (OILK).</p> <p>USO is designed to track the daily price movements of West Texas Intermediate light, sweet crude oil. However, due to the differences in the benchmarks they track (WTI for USO, Brent for BNO), the performance of these two funds can diverge based on the spread between WTI and Brent crude oil prices.</p> <p>OILK, on the other hand, seeks to provide total return through actively managed exposure to the West Texas Intermediate crude oil futures markets, but without the need for a K-1 tax form. This makes OILK a potentially more tax-efficient investment compared to BNO and USO for individual investors.</p> <p>The spread between West Texas Intermediate crude oil and Brent crude oil primarily reflects differences in oil quality, geopolitical risk, and transportation costs. WTI, sourced from U.S. oil fields, is slightly lighter and sweeter than Brent, making it marginally easier to refine, which sometimes commands a premium. However, Brent typically trades at a higher price due to its broader geographic accessibility and being a seaborne crude, which makes it available to a wider range of markets.</p> <p>BNO has done considerably better over the last several years relative to WTI. This makes sense given supply being more volatile outside the US due to the Russia/Ukraine war and other dynamics.</p> <p><figure contenteditable=\"false\"><span><img contenteditable=\"false\" loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2024/3/17/39580-17107142641371017.png\"/></span><figcaption><p>stockcharts.com</p></figcaption></figure></p> <h2>The Pros And Cons Of Investing In BNO</h2> <p>Like any investment, there are potential advantages and drawbacks to consider when investing in BNO. Here are some key points to ponder:</p> <p><strong>Pros:</strong></p> <ol> <li><p><strong>Direct Exposure to Oil Prices:</strong> BNO provides exposure to Brent crude oil prices through futures, making it an effective tool for investors looking to hedge against or speculate on oil price movements.</p></li> <li><p><strong>Ease of Trading:</strong> As an ETF, BNO shares can be bought and sold on the NYSE Arca during market hours, just like stocks. This provides high liquidity and ease of trading compared to other investment vehicles like futures contracts.</p></li> <li><p><strong>No Need for a Futures Account:</strong> BNO offers commodity exposure without the need for a commodity futures account, which can be complex and costly to maintain.</p></li> </ol> <p><strong>Cons:</strong></p> <ol> <li><p><strong>High Volatility:</strong> Like all commodities, oil prices can be highly volatile. This volatility can lead to substantial price swings in BNO's share price.</p></li> <li><p><strong>Geopolitical Risks:</strong> Oil prices, and therefore BNO's performance, can be significantly affected by geopolitical events, such as conflicts in oil-producing regions.</p></li> <li><p><strong>Roll Yield:</strong> BNO invests in futures contracts, which need to be rolled over as they expire. If the future contracts it buys are more expensive than the ones it sells (a situation known as contango), this could negatively impact the fund's returns.</p></li> </ol> <h2>Making An Investment Decision</h2> <div></div> <p>Investing in the United States Brent Oil Fund can provide a unique opportunity to gain exposure to Brent crude oil prices. This ETF is best suited for investors who understand the risks associated with commodity investing, have a high risk tolerance, and are looking for a hedge against oil price volatility or a speculative play on oil price movements.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>BNO: A Convenient Way To Play Resurgent Brent</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nBNO: A Convenient Way To Play Resurgent Brent\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-03-19 19:28 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4679090-bno-a-convenient-way-to-play-resurgent-brent><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Investing in Brent crude oil provides exposure to the energy sector without investing in individual oil companies.United States Brent Oil Fund offers investors a way to gain exposure to Brent crude ...</p>\n\n<a href=\"https://seekingalpha.com/article/4679090-bno-a-convenient-way-to-play-resurgent-brent\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1452806002/image_1452806002.jpg","relate_stocks":{"BK4585":"ETF&股票定投概念","BK4550":"红杉资本持仓","BK4588":"碎股","OILK":"ProShares K-1 Free Crude Oil ETF","USO":"美国原油ETF","BNO":"美国布伦特原油基金有限合伙企业","UCO":"二倍做多彭博原油ETF","USCF":"THEMES US CASH FLOW CHAMPIONS ETF","SCO":"二倍做空彭博原油指数ETF","BK4570":"地缘局势概念股","FDN":"First Trust Dow Jones Internet I"},"source_url":"https://seekingalpha.com/article/4679090-bno-a-convenient-way-to-play-resurgent-brent","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2420724725","content_text":"Investing in Brent crude oil provides exposure to the energy sector without investing in individual oil companies.United States Brent Oil Fund offers investors a way to gain exposure to Brent crude oil through futures contracts.BNO has distinct characteristics compared to similar ETFs, such as the United States Oil Fund and the ProShares K-1 Free Crude Oil Strategy ETF.Jeremy Poland Oil is looking more and more interesting here as inflation seems to be picking up again and with a US economy that still is showing overall strength. The investment case for Brent crude oil in particular, a major trading classification of sweet light crude oil, primarily hinges on its status as a benchmark for global oil prices, reflecting the health of worldwide energy demand. It is extracted from the North Sea and serves as a reference price for buyers in Western Europe, Africa, and the Middle East. Investing in Brent crude allows investors to gain exposure to the energy sector without investing in the equities of individual oil companies. The demand for oil is influenced by various factors such as geopolitical tensions, OPEC+ decisions, the global economic climate, and advancements in energy technologies. While the transition towards renewable energy sources presents a long-term challenge, the enduring need for fossil fuels in transportation, industry, and as feedstock for petrochemicals underpins the investment case for Brent crude. Moreover, its price volatility provides opportunities for traders to profit from price swings, although it also adds an element of risk. Investing in Brent crude oil, however, isn't easy. Thankfully, there are ETFs that can get you access, even if imperfect, to Oil price movement. The United States Brent Oil Fund (NYSEARCA:BNO) offers investors an effective means to gain exposure to Brent crude oil. Managed by The United States Commodity Funds (USCF), BNO is an exchange-traded security designed to track the daily price movements of Brent crude oil through futures contracts. Understanding BNO's Structure And Holdings BNO's structure is somewhat unique. It invests primarily in listed crude oil futures contracts and other oil-related futures contracts. The investments are collateralized by cash, cash equivalents, and U.S. government obligations with remaining maturities of two years or less. The structure of BNO allows it to offer commodity exposure without the need for investors to establish a commodity futures account. This makes it a practical option for those seeking exposure to oil prices but does not have the expertise, funds, or desire to directly trade futures. The fund is essentially continuously rolling into the near-term futures contracts through the ETF structure. uscfinvestments.com Comparing BNO With Similar ETFs When compared with similar ETFs that also focus on crude oil, BNO exhibits certain distinct characteristics. Two such comparable ETFs are the United States Oil Fund, LP (USO) and the ProShares K-1 Free Crude Oil Strategy ETF (OILK). USO is designed to track the daily price movements of West Texas Intermediate light, sweet crude oil. However, due to the differences in the benchmarks they track (WTI for USO, Brent for BNO), the performance of these two funds can diverge based on the spread between WTI and Brent crude oil prices. OILK, on the other hand, seeks to provide total return through actively managed exposure to the West Texas Intermediate crude oil futures markets, but without the need for a K-1 tax form. This makes OILK a potentially more tax-efficient investment compared to BNO and USO for individual investors. The spread between West Texas Intermediate crude oil and Brent crude oil primarily reflects differences in oil quality, geopolitical risk, and transportation costs. WTI, sourced from U.S. oil fields, is slightly lighter and sweeter than Brent, making it marginally easier to refine, which sometimes commands a premium. However, Brent typically trades at a higher price due to its broader geographic accessibility and being a seaborne crude, which makes it available to a wider range of markets. BNO has done considerably better over the last several years relative to WTI. This makes sense given supply being more volatile outside the US due to the Russia/Ukraine war and other dynamics. stockcharts.com The Pros And Cons Of Investing In BNO Like any investment, there are potential advantages and drawbacks to consider when investing in BNO. Here are some key points to ponder: Pros:  Direct Exposure to Oil Prices: BNO provides exposure to Brent crude oil prices through futures, making it an effective tool for investors looking to hedge against or speculate on oil price movements. Ease of Trading: As an ETF, BNO shares can be bought and sold on the NYSE Arca during market hours, just like stocks. This provides high liquidity and ease of trading compared to other investment vehicles like futures contracts. No Need for a Futures Account: BNO offers commodity exposure without the need for a commodity futures account, which can be complex and costly to maintain.  Cons:  High Volatility: Like all commodities, oil prices can be highly volatile. This volatility can lead to substantial price swings in BNO's share price. Geopolitical Risks: Oil prices, and therefore BNO's performance, can be significantly affected by geopolitical events, such as conflicts in oil-producing regions. Roll Yield: BNO invests in futures contracts, which need to be rolled over as they expire. If the future contracts it buys are more expensive than the ones it sells (a situation known as contango), this could negatively impact the fund's returns.  Making An Investment Decision  Investing in the United States Brent Oil Fund can provide a unique opportunity to gain exposure to Brent crude oil prices. This ETF is best suited for investors who understand the risks associated with commodity investing, have a high risk tolerance, and are looking for a hedge against oil price volatility or a speculative play on oil price movements.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":1,"commentSize":1,"repostSize":1,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}