Invesco DB Oil Fund Quarterly Report for March 31, 2024

Press release · 05/08 15:10
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

In Q1 2024, the ETF’s net asset value (NAV) per share increased by 11.60% from $13.96 at the start of the quarter to $15.58 at the end. This was mainly driven by a $1.45 gain on investments in crude oil futures contracts.

The market price per share showed a similar 11.64% increase over the quarter.

Revenue and Expenses

Q1 2024 Q1 2023
Net Investment Income 4.59% of average net assets
Expenses after waivers 0.73% of average net assets
Expenses prior to waivers 0.80% of average net assets

Expenses remained low and stable from last year. Higher net investment income was driven by stronger performance of futures investments.

Crude Oil Market Trends

Crude oil prices rose around 12% in Q1 2024, supported by:

  • Escalating geopolitical tensions in the Middle East and Ukraine
  • Improving economic outlook and potential for looser Fed policy
  • OPEC+ production cuts tightening market balances

This environment was positive for crude oil futures prices and the fund’s investments.

Liquidity and Capital Resources

As of March 31, 2024, the fund held:

  • US Treasury bonds - Used as collateral for futures positions
  • Money market funds & T-Bill ETFs - Held for cash management

The fund has no outstanding capital commitments or off-balance sheet arrangements.

Its main source of capital is the ongoing issuance of new ETF shares to authorized participants.

Cash Flows

In Q1 2024:

  • Net cash provided by operating activities was $19.8 million
  • Net cash used in financing activities was $19.8 million

This cash was mainly used to invest in futures positions, US Treasuries, and money market instruments to track the index.

Future Outlook

The fund aims to closely track the performance of the DBIQ Optimum Yield Crude Oil Index Excess Return.

If income from the fund’s cash holdings exceeds expenses, the ETF share price could outperform the index. However, higher fees and expenses could cause underperformance instead.

Geopolitics, OPEC policy, and macroeconomic conditions will remain key drivers of crude oil futures prices and the ETF’s performance going forward.