You will lose money unless spot prices increase by more than 28% between now and when the June contract expires.
But the futures say the spot will increase 28%. If you know better (like you seem to do) you should short them and you'll making tons of money!!
Because the whole world already did this before you? And they did not do very well... Although I agree it's a much better idea than buying oil futures (as an investment)...
JP Morgan Q1 Earnings Call: https://www.fool.com/earnings/call-...hase-co-jpm-q1-2020-earnings-call-transc.aspx
Alright jackass. My whole point is, oil can go to $40 like OP says and he will still make nothing if it does not rise faster than the current curve is predicting. Oil ETFs are short term trading instruments, not investing ones. Read the prospectus.
I could never be so heavy, on one market even though the lows either in or nearly, but am in all the energies/hedged but on stock/etf side, have 3% position in UCO and not hedged, one few times of not having, been ave down some from 2 bucks. Oil spreads look very nice on June/Aug. I am often years to months too early buying/selling futures, but given always hedge those, loses minimal. Finally paid off some on short Indexes and remain short, but hedging.
The ETF that I am using DOES track the Oil price changes very closely. I have put the 2 prices on the same chart and it is almost perfect. Even with the expenses it follows very closely, which it is a great performance from my point of view. The KID says: “WisdomTree WTI Crude Oil is designed to enable investors to gain an exposure to a total return investment in crude oil by tracking the Bloomberg Crude Oil Subindex (the "Index") and providing a collateral yield. The product reflects the performance of the Index such that, for example, if the Index were to rise in value by 5% over a period, the product would increase in value by 5% over that same period (before fees, expenses and adjustments) and if the Index were to fall in value by 5% over a period, the product would fall in value by 5% over that same period (before fees, expenses and adjustments). The product is an exchange traded product ("ETP"). Securities in this ETP are structured as debt securities and not as shares (equity). They are traded on exchange just like shares in a company. The ETP is backed by swaps with Citigroup Global Markets Limited and Merrill Lynch International. The payment obligations of the swap counterparties to the Issuer are protected by collateral held in a segregated account at an independent custodian, The Bank of New York Mellon”