The Real Reason Behind U.S. Oil Fund's Huge Strategic Shift

Stock market investors have seen huge swings in share prices across just about every sector of the economy as businesses come to grips with the realities of the coronavirus pandemic. The energy markets have seen some of the biggest disruptions of all, with crude oil prices plunging on fears of reduced demand during a prolonged period of lower economic activity. In anticipation of better times ahead, many energy-market participants believe that what's gone down has to come up.

United States Oil Fund (NYSEMKT: USO) has gotten a lot of attention lately as a potential way to get exposure to crude oil prices. However, the fund has had to make major changes to its investment strategy in response to the volatile price environment.

That's not because the fund has suddenly turned bearish on oil. Rather, it's a much simpler calculation: U.S. Oil Fund wants to survive, and it would rather be less effective in meeting its purported investment objective than disappear entirely.

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Source Fool.com