10-Q: United States Brent Oil Fund (BNO) Reports Q1 2025 Results: NAV Increases Amid Market Volatility

United States Brent Oil Fund's NAV per share increased to $31.13 in Q1 2025, reflecting a 3.28% gain amid fluctuating Brent crude oil prices.

Summary

• United States Brent Oil Fund, LP (BNO) reported its financial results for the quarter ended March 31, 2025.
• The fund's investment objective is to mirror the daily percentage changes in the spot price of Brent crude oil.
• BNO primarily invests in futures contracts for crude oil and other petroleum-based fuels.
• As of March 31, 2025, BNO had 3,150,000 shares outstanding.
• The NAV per share increased from $30.14 at the beginning of the quarter to $31.13 at the end of the quarter, representing a 3.28% increase.
• Net income for the quarter was $4,895,137, or $0.99 per limited partner share.
• The fund's average daily total net assets were $99,398,144.
• BNO held 1,312 Futures Contracts for Brent crude oil traded on the ICE Futures Europe as of March 31, 2025.
• The fund's management fee is 0.75% per annum of average daily total net assets.
• Brent crude oil futures prices were volatile during the quarter, with the Benchmark Futures Contract starting at $74.64 per barrel and ending at $74.77 per barrel.
• The fund seeks to maintain an average daily percentage change in its NAV within plus/minus 10% of the average daily percentage change in the price of the Benchmark Futures Contract over any 30-day period.
• For the 30-valuation days ended March 31, 2025, the average daily change in price of the Benchmark Futures Contract was 0.049%, while the average daily change in the per share NAV of BNO over the same time period was 0.061%.

Sentiment

Score: 7

Explanation: The document presents a balanced view, highlighting both positive performance (NAV increase, benchmark tracking) and potential risks (market volatility, credit risk). The sentiment is neutral to slightly positive.

Positives

• BNO's NAV per share increased by 3.28% during Q1 2025.
• The fund successfully tracked its benchmark within the targeted range.
• Net income was positive at $4,895,137 for the quarter.
• The fund maintains a diversified portfolio of cash, cash equivalents and treasuries.

Negatives

• Brent crude oil futures prices were volatile during the quarter.
• The fund is subject to risks associated with contango and backwardation in the futures market.
• The fund's performance is subject to market risk and credit risk.
• The fund is subject to the risk of potential losses from investments in government money market funds.

Risks

• The fund is exposed to commodity price risk, particularly Brent crude oil price risk.
• The fund is subject to market risk, including fluctuations in interest rates and foreign exchange rates.
• The fund faces credit risk related to counterparties in futures contracts and other investments.
• Geopolitical events, natural disasters, and public health disruptions could negatively impact the price of Brent crude oil and the fund's investments.
• Inflation could erode the value of the fund's cash and Treasury investments.
• The fund may potentially lose money by investing in government money market funds.

Future Outlook

The report contains forward-looking statements regarding future events and performance, subject to various risks and uncertainties, including economic, market, and business conditions, changes in laws and regulations, and geopolitical developments. BNO assumes no obligation to update these statements.

Industry Context

The report provides insights into the performance of a commodity pool focused on Brent crude oil, a key benchmark in the global oil market. The fund's performance is influenced by factors such as supply and demand dynamics, geopolitical events, and market volatility. The report also discusses the impact of contango and backwardation on total returns.

Comparison to Industry Standards

• The report does not provide specific comparisons to other Brent oil funds or ETFs.
• However, it details BNO's tracking of the Benchmark Futures Contract, which is a key metric for evaluating the fund's performance relative to its investment objective.
• The report also discusses the correlation between Brent crude oil and other energy commodities and asset classes, providing context for BNO's performance within the broader market.

Legal Proceedings

• The document discusses several ongoing legal proceedings involving USCF and USO, including the Optimum Strategies Action, In re: United States Oil Fund, LP Securities Litigation, the Wang Class Action, the Mehan Action, and In re United States Oil Fund, LP Derivative Litigation.
• These proceedings primarily relate to disclosures and actions taken during the market volatility in early 2020.

Related Party Transactions

• The document discloses the management fee paid to USCF, the general partner, which is calculated as 0.75% per annum of average daily total net assets.
• It also mentions that USCF pays the fees of the Marketing Agent and BNY Mellon for various services.

Stakeholder Impact

• The report provides information relevant to shareholders, including the fund's performance, investment strategy, and risk factors.
• It also discusses the impact of market conditions and regulatory requirements on the fund's operations.
• The legal proceedings discussed in the report could potentially impact the fund's financial position and reputation.

Key Dates

Keywords

Brent crude oil, futures contracts, NAV, United States Brent Oil Fund, BNO, commodity pool, oil market, financial results, Q1 2025, USCF