8-K: United States Brent Oil Fund Reports $4.7 Million Net Loss in July

The United States Brent Oil Fund, LP reported a net loss of $4.7 million for the month of July 2024, primarily driven by losses in commodity futures trading.

Summary

• The United States Brent Oil Fund, LP released its monthly account statement for July 2024, showing a net loss of $4,733,648.
• This loss was primarily due to a realized trading loss of $908,250 and an unrealized loss of $4,242,160 on commodity futures.
• The fund also generated $246,741 in dividend income and $293,646 in interest income.
• Total expenses for the month were $127,125, including management fees, professional fees, brokerage commissions, and directors' fees.
• The fund's net asset value decreased from $128,693,560 at the beginning of July to $111,962,943 at the end of the month.
• This change in net asset value includes additions of $11,268,410 from the issuance of 350,000 shares and withdrawals of $23,265,379 from the redemption of 750,000 shares.
• The net asset value per share at the end of July was $31.10, based on 3,600,000 shares.

Sentiment

Score: 3

Explanation: The document reports a significant net loss and a decrease in net asset value, indicating a negative sentiment from an investment perspective. The losses in commodity futures trading are a concern.

Positives

• The fund generated $246,741 in dividend income and $293,646 in interest income during the month.

Negatives

• The fund experienced a significant net loss of $4,733,648 for the month of July.
• The fund had substantial losses from commodity futures trading, both realized and unrealized.
• The fund's net asset value decreased significantly during the month.

Risks

• The fund's performance is highly dependent on the volatile commodity futures market.
• Unrealized losses can significantly impact the fund's net asset value.
• Fluctuations in the price of Brent oil can lead to substantial gains or losses.

Management Comments

• The Chief Financial Officer, Stuart P. Crumbaugh, certified that the information in the account statement is accurate and complete to the best of his knowledge and belief.

Industry Context

This report reflects the inherent volatility of commodity markets, particularly in the oil sector, where price fluctuations can significantly impact fund performance. The fund's performance is directly tied to the price of Brent crude oil and the futures market.

Comparison to Industry Standards

• The United States Brent Oil Fund's performance can be compared to other commodity-based ETFs and mutual funds, such as the Invesco DB Oil Fund (DBO) and the ProShares Ultra Bloomberg Crude Oil (UCO).
• These funds also experience volatility based on the price of oil and the futures market.
• A loss of this magnitude in a single month is not uncommon for funds heavily invested in commodity futures, especially during periods of high market volatility.
• The fund's performance should be benchmarked against the performance of Brent crude oil itself and the performance of similar funds.

Stakeholder Impact

• Shareholders will be negatively impacted by the decrease in net asset value and the reported loss.
• The fund's performance may affect investor confidence and future investment decisions.

Key Dates

Keywords

Brent Oil, Commodity Futures, Net Asset Value, Trading Loss, Monthly Account Statement, BNO, USCF