NRGZ - DBO: Underperformance Likely To Resume

Investment thesis

Since our last take on the Invesco DB Oil ETF (DBO), our constructive view has not materialized, as increasing geopolitical tensions in the Middle East were offset by mounting trade tensions between China and the U.S.

In this context and given the risk-off environment, we believe that headwinds will persist on crude oil futures and its proxy, DBO, given that domestic oil demand is steadying, speculative bets are skewed to the long side and that crude oil price seasonality remains unfriendly for the month of August.

In this vein, we are

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