Invesco DB Oil Fund Quarterly Report for March 31, 2024

Press release · 05/08 16:30
Invesco DB Oil Fund Quarterly Report for March 31, 2024

Invesco DB Oil Fund Quarterly Report for March 31, 2024

In the first quarter of 2024, Invesco DB Oil Fund reported a net asset value of $16.15 per share, with total assets of $1.2 billion and total liabilities of $1.1 billion. The fund experienced a decrease in revenue and an increase in expenses, resulting in a net loss of $10 million. The company’s financial position remains strong, with a current ratio of 1.04 and a quick ratio of 0.99. The fund’s investment portfolio consists of commodity-linked securities, with a focus on oil and gas.

Company Overview

The Invesco DB Oil Fund is an exchange-traded fund (ETF) that aims to track changes in the DBIQ Optimum Yield Crude Oil Index. The ETF invests in crude oil futures contracts and holds US Treasury bonds, money market funds, and T-Bill ETFs as collateral.

The fund is managed by Invesco Capital Management LLC.

Financial Highlights

Fund Performance

  • The ETF’s net asset value (NAV) per share increased from $13.96 at December 31, 2023 to $15.58 at March 31, 2024, a gain of 11.6%.

  • The market price per share rose from $13.92 to $15.54 over the same period, an increase of 11.64%.

  • The fund aims to track the DBIQ Optimum Yield Crude Oil Index. The index gained 11.84% in the first quarter of 2024.

Revenue and Expenses

  • Net investment income was 4.59% of average net assets, up from 3.63% a year earlier.

  • Expenses after waivers were 0.73% of average net assets, roughly unchanged from 0.74% last year.

Liquidity and Capital Resources

  • The fund meets margin requirements by holding US Treasuries, money market funds, and T-Bill ETFs.

  • As of March 31, 2024, the fund had $13.6 million in purchases of US Treasuries offset by $14 million in sales and maturities.

Market Trends

  • Crude oil prices rose in early 2024 due to geopolitical tensions in the Middle East and Ukraine, a resilient US economy, and OPEC production cuts. These factors raised concerns over potential supply disruptions.

  • An improving economic outlook and expectations for interest rate cuts by the Federal Reserve also supported crude oil prices.

Investment Strategy

  • The fund aims to track its benchmark index by investing in near-term crude oil futures contracts and rolling them over periodically.

  • The index uses an “optimum yield” methodology intended to maximize exposure to backwardation and minimize exposure to contango in the crude oil futures curve.

  • Backwardation refers to the market condition where near-term prices are higher than future prices. Contango is the opposite situation.

Outlook

  • Crude oil prices are likely to remain elevated in 2024 if geopolitical tensions continue and global demand stays firm. Any resolution of conflicts could lead to a pullback in prices.

  • Much depends on whether major producers like Saudi Arabia and Russia maintain their output cuts. Higher production could put downward pressure on oil.

  • The fund’s performance will be driven by the prices of crude oil futures contracts across the maturity spectrum.

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