8-K: United States Brent Oil Fund, LP Reports Annual Financial Statements for 2024
Annual Results
United States Brent Oil Fund, LP (BNO) releases its annual financial statements for the year ended December 31, 2024, showing a net income of $10.59 million.
Summary
- United States Brent Oil Fund, LP (BNO) has released its annual financial statements for the year ended December 31, 2024.
- The fund reported a net income of $10.59 million for the year 2024, compared to a net loss of $4.09 million in 2023.
- The net asset value (NAV) per share increased from $27.39 at the beginning of the year to $30.14 at the end of the year.
- Limited partners' capital decreased from $130.08 million to $114.53 million due to share redemptions exceeding additions.
- The fund invests primarily in futures contracts for crude oil and other petroleum-based fuels.
- The fund's investment objective is to reflect the daily changes in the spot price of Brent crude oil.
- The fund held 1,535 futures contracts for Brent crude oil traded on the ICE Futures Europe as of December 31, 2024.
- The fund's general partner is United States Commodity Funds LLC (USCF).
Sentiment
Score: 7
Explanation: The sentiment is moderately positive due to the improved financial performance compared to the previous year, as indicated by the shift from a net loss to a net income. However, the decrease in total assets and limited partners' capital tempers the positive outlook.
Positives
- The fund achieved a net income of $10.59 million in 2024, a substantial turnaround from the net loss of $4.09 million in 2023.
- The NAV per share increased by $2.75, from $27.39 to $30.14.
- The fund maintains effective internal control over financial reporting.
- The fund's investments are valued using a fair value hierarchy, providing transparency.
Negatives
- Limited partners' capital decreased from $130.08 million to $114.53 million due to redemptions.
- Total assets decreased from $130.35 million to $114.87 million.
Risks
- The fund is exposed to market risk arising from changes in the market value of its contracts.
- The fund is exposed to credit risk, which is the risk of failure by another party to perform according to the terms of a contract.
- Significant market volatility in the Brent crude oil markets could affect the value, pricing, and liquidity of the fund's investments.
- The insolvency of the fund's FCM or custodian could result in a loss of assets.
- The fund's performance is subject to the risks of contango and backwardation in the crude oil market.
Future Outlook
The document does not contain specific forward-looking statements or guidance beyond the fund's investment objective.
Management Comments
- John P. Love, President and Chief Executive Officer of United States Commodity Funds LLC, states, 'Thank you for your continued interest in BNO.'
Industry Context
BNO operates in the exchange-traded fund (ETF) market, providing investors with exposure to the Brent crude oil market through futures contracts. The fund's performance is influenced by factors affecting the supply and demand of crude oil, as well as market conditions such as contango and backwardation.
Comparison to Industry Standards
- BNO's management fee of 0.75% is comparable to other commodity-based ETFs.
- The fund's investment strategy of tracking the daily changes in the spot price of Brent crude oil is a common approach for oil-related ETFs.
- Other comparable companies include United States Oil Fund, LP (USO) and Invesco DB Oil Fund (DBO).
- BNO's performance is directly tied to the price fluctuations of Brent crude oil futures contracts, similar to how USO's performance is tied to WTI crude oil futures contracts.
Related Party Transactions
- USCF receives a management fee equal to 0.75% per annum of average daily total net assets.
- USCF pays the fees of BNY Mellon for custodial, administrative and accounting, and transfer agency services.
- USCF pays the fee of the Marketing Agent, which is equal to 0.025% of BNOs total net assets.
Stakeholder Impact
- Shareholders benefit from the increased NAV per share.
- Authorized Participants are affected by the creation and redemption fees.
- The fund's performance impacts investors seeking exposure to the Brent crude oil market.
Key Dates
| Date | Description |
|---|---|
| September 2, 2009 | United States Brent Oil Fund, LP (BNO) was organized as a limited partnership under the laws of the state of Delaware. |
| June 2, 2010 | BNO commenced investment operations and listed its shares on the NYSE Arca under the ticker symbol BNO. |
| December 15, 2017 | Date of the Fourth Amended and Restated Agreement of Limited Partnership. |
| March 20, 2020 | Date of the Custody Agreement, Fund Administration and Accounting Agreement, and Transfer Agency and Service Agreement with The Bank of New York Mellon. |
| April 1, 2020 | Effective date of the agreements with BNY Mellon. |
| January 27, 2023 | The SEC declared effective a registration statement filed by BNO that registered an unlimited number of shares. |
| August 8, 2023 | ADM Investor Services, Inc. engaged to serve as additional FCM to BNO. |
| December 31, 2024 | End of the reporting period for the annual financial statements. |
| March 26, 2025 | Date of the current report on Form 8-K and issuance of the annual financial statements. |
Keywords
Brent Crude Oil, Futures Contracts, Financial Statements, Commodity Pool, United States Brent Oil Fund, BNO, USCF
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