Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 02, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-34704 | |
Entity Tax Identification Number | 27-0925904 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 1850 Mt. Diablo Boulevard, Suite 640 | |
Entity Address, City or Town | Walnut Creek | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94596 | |
City Area Code | 510 | |
Local Phone Number | 522-9600 | |
Security Exchange Name | NYSE | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | United States Brent Oil Fund, LP | |
Entity Central Index Key | 0001472494 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | BNO | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 31,250,000 | |
Title of 12(b) Security | Shares of United States Brent Oil Fund, LP |
Condensed Statements of Financi
Condensed Statements of Financial Condition - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | |
Assets | |||
Cash and cash equivalents (at cost $296,827,349 and $72,725,833, respectively) (Notes 2 and 5) | $ 296,827,349 | $ 72,725,833 | |
Equity in trading accounts: | |||
Cash and cash equivalents (at cost $66,696,908 and $10,877,607, respectively) | 66,696,908 | 10,877,607 | |
Unrealized gain (loss) on open commodity futures contracts | (6,467,200) | 1,161,610 | |
Receivable from General Partner (Note 3) | 497,324 | 80,032 | |
Dividends receivable | 3,814 | 26,116 | |
Interest receivable | 5,378 | 4,902 | |
Prepaid insurance* | [1] | 4,848 | 2,132 |
Prepaid registration fees | 159,902 | 0 | |
ETF transaction fees receivable | 21 | 0 | |
Total Assets | 357,728,344 | 84,878,232 | |
Liabilities and Partners' Capital | |||
General Partner management fees payable (Note 3) | 231,291 | 52,399 | |
Professional fees payable | 112,918 | 117,559 | |
Brokerage commissions payable | 15,505 | 2,816 | |
Directors' fees payable* | [1] | 5,388 | 3,272 |
Total Liabilities | 365,102 | 176,046 | |
Commitments and Contingencies (Notes 3, 4 & 5) | |||
Partners' Capital | |||
General Partners | 0 | 0 | |
Limited Partners | 357,363,242 | 84,702,186 | |
Total Partners' Capital | 357,363,242 | 84,702,186 | |
Total Liabilities and Partners' Capital | $ 357,728,344 | $ 84,878,232 | |
Limited Partners' shares outstanding | 33,400,000 | 4,050,000 | |
Net asset value per share | $ 10.70 | $ 20.91 | |
Market value per share | $ 10.65 | $ 20.85 | |
[1] | * |
Condensed Statements of Finan_2
Condensed Statements of Financial Condition (Parenthetical) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Condensed Statements of Financial Condition | |||
Cash and cash equivalents | $ 296,827,349 | $ 72,725,833 | $ 71,249,689 |
Restricted cash and cash equivalents | $ 66,696,908 | $ 10,877,607 |
Condensed Schedule of Investmen
Condensed Schedule of Investments (Unaudited) | Sep. 30, 2020USD ($)contract | |
United States - Money Market Funds [Member] | Cash Equivalents [Member] | ||
Market Value | $ 30,347,000 | |
% of Partners' Capital | 8.49% | |
Fidelity Investments Money Market Funds - Government Portfolio [Member] | United States - Money Market Funds [Member] | Cash Equivalents [Member] | ||
Shares/Principal Amount | $ 201,000 | [1] |
Market Value | $ 201,000 | [1] |
% of Partners' Capital | 0.06% | [1] |
Goldman Sachs Financial Square Funds - Government Fund - Class FS [Member] | United States - Money Market Funds [Member] | Cash Equivalents [Member] | ||
Shares/Principal Amount | $ 20,086,000 | [1] |
Market Value | $ 20,086,000 | [1] |
% of Partners' Capital | 5.62% | [1] |
RBC U.S. Government Money Market Fund - Institutional Share Class [Member] | United States - Money Market Funds [Member] | Cash Equivalents [Member] | ||
Shares/Principal Amount | $ 10,060,000 | [1] |
Market Value | $ 10,060,000 | [1] |
% of Partners' Capital | 2.81% | [1] |
ICE Brent Crude Oil Futures CO December 2020 contracts, expiring October 2020 | United Kingdom Contracts [Member] | Open Commodity Futures Contracts - Long [Member] | ||
Shares/Principal Amount | $ 363,859,900 | [2] |
Number of Contracts | contract | 8,449 | [2] |
Fair Value/Unrealized Gain (Loss) on Open Commodity Contracts | $ (6,467,200) | [2] |
% of Partners' Capital | (1.81%) | [2] |
[1] | Reflects the 7-day yield at September 30, 2020 | |
[2] | Collateral amounted to $66,696,908 on open commodity futures contracts. |
Condensed Schedule of Investm_2
Condensed Schedule of Investments (Unaudited) (Parenthetical) | Sep. 30, 2020USD ($) |
Condensed Schedule of Investments (Unaudited) | |
Collateral amount on open futures contracts | $ 66,696,908 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Gain (loss) on trading of commodity futures contracts: | |||||
Realized gain (loss) on closed commodity futures contracts | $ 4,940,930 | $ 7,012,170 | $ 63,479,920 | $ 14,459,540 | |
Change in unrealized gain (loss) on open commodity futures contracts | (5,385,770) | (12,158,780) | (7,628,810) | (341,900) | |
Dividend income | 68,536 | 133,489 | 252,241 | 455,302 | |
Interest income | [1] | 31,647 | 345,384 | 378,435 | 1,096,830 |
ETF transaction fees | 9,100 | 1,750 | 40,971 | 6,300 | |
Total Income (Loss) | (335,557) | (4,665,987) | 56,522,757 | 15,676,072 | |
Expenses | |||||
General Partner management fees (Note 3) | 758,726 | 162,830 | 1,514,261 | 504,194 | |
Professional fees | 113,298 | 36,421 | 197,177 | 53,778 | |
Brokerage commissions | 161,652 | 26,184 | 413,504 | 77,908 | |
Directors' fees and insurance | 8,235 | 5,318 | 20,525 | 13,905 | |
Registration fees | 87,470 | 0 | 168,970 | 0 | |
Total Expenses | 1,129,381 | 230,753 | 2,314,437 | 649,785 | |
Expense waiver | (220,529) | (35,357) | (497,324) | (44,752) | |
Net Expenses | 908,852 | 195,396 | 1,817,113 | 605,033 | |
Net Income (Loss) | $ (1,244,409) | $ (4,861,383) | $ 54,705,644 | $ 15,071,039 | |
Net Income (Loss) per limited partner share | $ (0.07) | $ (1.04) | $ (10.21) | $ 2.91 | |
Net Income (Loss) per weighted average limited partner share | $ (0.03) | $ (1.04) | $ 2.13 | $ 3.14 | |
Weighted average limited partner shares outstanding | 35,792,391 | 4,665,217 | 25,678,832 | 4,806,227 | |
[1] | Interest income does not exceed paid in kind of 5%. |
Condensed Statement of Changes
Condensed Statement of Changes in Partners' Capital (Unaudited) - USD ($) | Limited Partner [Member] | Total |
Beginning Balances at Dec. 31, 2018 | $ 73,624,628 | |
Addition of partnership shares | 17,034,820 | |
Redemption of partnership shares | (28,827,507) | |
Net income (loss) | 15,071,039 | $ 15,071,039 |
Ending Balances at Sep. 30, 2019 | 76,902,980 | |
Beginning Balances at Jun. 30, 2019 | 91,836,193 | |
Addition of partnership shares | 5,329,690 | |
Redemption of partnership shares | (15,401,520) | |
Net income (loss) | (4,861,383) | (4,861,383) |
Ending Balances at Sep. 30, 2019 | 76,902,980 | |
Beginning Balances at Dec. 31, 2019 | 84,702,186 | 84,702,186 |
Addition of partnership shares | 383,337,923 | |
Redemption of partnership shares | (165,382,511) | |
Net income (loss) | 54,705,644 | 54,705,644 |
Ending Balances at Sep. 30, 2020 | 357,363,242 | 357,363,242 |
Beginning Balances at Jun. 30, 2020 | 413,495,048 | |
Addition of partnership shares | 30,138,640 | |
Redemption of partnership shares | (85,026,037) | |
Net income (loss) | (1,244,409) | (1,244,409) |
Ending Balances at Sep. 30, 2020 | $ 357,363,242 | $ 357,363,242 |
Condensed Statement of Change_2
Condensed Statement of Changes in Partners' Capital (Unaudited) (Parenthetical) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Condensed Statement of Changes in Partners' Capital (Unaudited) | ||||
Addition of partnership shares | 2,700,000 | 300,000 | 45,850,000 | 950,000 |
Redemption of partnership shares | (7,700,000) | (850,000) | (16,500,000) | (1,550,000) |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | ||
Cash Flows from Operating Activities: | |||
Net income (loss) | $ 54,705,644 | $ 15,071,039 | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Change in unrealized (gain) loss on open commodity futures contracts | 7,628,810 | 341,900 | |
(Increase) decrease in receivable from General Partner | (417,292) | 36,890 | |
(Increase) decrease in dividends receivable | 22,302 | (16,991) | |
(Increase) decrease in ETF transaction Fees receivable | (21) | 0 | |
(Increase) decrease in interest receivable | (476) | (904) | |
(Increase) decrease in prepaid insurance | [1] | (2,716) | (2,767) |
(Increase) decrease in prepaid registration fees | (159,902) | 0 | |
Increase (decrease) in General Partner management fees payable | 178,892 | 963 | |
Increase (decrease) in professional fees payable | (4,641) | (107,763) | |
Increase (decrease) in brokerage commissions payable | 12,689 | 0 | |
Increase (decrease) in directors' fees payable | [1] | 2,116 | 314 |
Net cash provided by (used in) operating activities | 61,965,405 | 15,322,681 | |
Cash Flows from Financing Activities: | |||
Addition of partnership shares | 383,337,923 | 17,034,820 | |
Redemption of partnership shares | (165,382,511) | (28,827,507) | |
Net cash provided by (used in) financing activities | 217,955,412 | (11,792,687) | |
Net Increase (Decrease) in Cash and Cash Equivalents | 279,920,817 | 3,529,994 | |
Total Cash, Cash Equivalents and Equity in Trading Accounts, beginning of period | 83,603,440 | 80,057,642 | |
Total Cash, Cash Equivalents and Equity in Trading Accounts, end of period | $ 363,524,257 | $ 83,587,636 | |
[1] | * |
Condensed Statements of Cash _2
Condensed Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Components of Cash and Cash Equivalents: | ||
Cash and cash equivalents | $ 296,827,349 | $ 71,249,689 |
Equity in Trading Accounts: | ||
Cash and cash equivalents | 66,696,908 | 12,337,947 |
Total Cash, Cash Equivalents and Equity in Trading Accounts | $ 363,524,257 | $ 83,587,636 |
ORGANIZATION AND BUSINESS
ORGANIZATION AND BUSINESS | 9 Months Ended |
Sep. 30, 2020 | |
ORGANIZATION AND BUSINESS | |
ORGANIZATION AND BUSINESS | NOTE 1 — ORGANIZATION AND BUSINESS The United States Brent Oil Fund, LP (“BNO”) was organized as a limited partnership under the laws of the state of Delaware on September 2, 2009. BNO is a commodity pool that issues limited partnership shares (“shares”) that may be purchased and sold on the NYSE Arca, Inc. (the “NYSE Arca”). BNO will continue in perpetuity, unless terminated sooner upon the occurrence of one or more events as described in its Fourth Amended and Restated Agreement of Limited Partnership dated as of December 15, 2017 (the “LP Agreement”). The investment objective of BNO is for the daily changes in percentage terms of its shares’ per share net asset value (“NAV”) to reflect the daily changes in percentage terms of the spot price of Brent crude oil, as measured by the daily changes in the price of a specified short-term futures contract on Brent crude oil as traded on the ICE Futures Exchange (the “ICE Futures”) that is the near month contract to expire, except when the near month contract is within two weeks of expiration, in which case it will be measured by the futures contract that is the next month contract to expire (the “Benchmark Futures Contract”), plus interest earned on BNO’s collateral holdings, less BNO’s expenses. BNO seeks to achieve its investment objective by investing so that the average daily percentage change in BNO’s NAV for any period of 30 successive valuation days will be within plus/minus 10 percent (10%) of the average daily percentage changes in the price of the Benchmark Futures Contract over the same period. BNO’s investment objective is not nor greater than one day United States Commodity Funds LLC (“USCF”), the general partner of BNO, believes that it is not practical to manage the portfolio to achieve such an investment goal when investing in Futures Contracts (as defined below) and Other Crude Oil-Related Investments (as defined below). BNO accomplishes its objective through investments in futures contracts for crude oil, diesel-heating oil, gasoline, natural gas and other petroleum-based fuels that are traded on the ICE Futures, the New York Mercantile Exchange (the “NYMEX”), or other U.S. and foreign exchanges (collectively, “Futures Contracts”), and other crude oil-related investments such as cash-settled options on Futures Contracts, forward contracts for crude oil, cleared swap contracts and over-the-counter (“OTC”) transactions that are based on the price of crude oil and other petroleum-based fuels, Futures Contracts and indices based on the foregoing (collectively, “Other Crude Oil-Related Investments”). As of September 30, 2020, BNO held 8,449 Futures Contracts for Brent crude oil traded on the ICE Futures Europe and did not hold any Futures Contracts for Brent crude oil traded on the NYMEX. BNO commenced investment operations on June 2, 2010 and has a fiscal year ending on December 31. USCF is responsible for the management of BNO. USCF is a member of the National Futures Association (the “NFA”) and became registered as a commodity pool operator with the Commodity Futures Trading Commission (the “CFTC”) effective December 1, 2005 and a swaps firm on August 8, 2013. USCF is also the general partner of the United States Oil Fund, LP (“USO”), the United States Natural Gas Fund, LP (“UNG”), the United States 12 Month Oil Fund, LP (“USL”) and the United States Gasoline Fund, LP (“UGA”), which listed their limited partnership shares on the American Stock Exchange (the “AMEX”) under the ticker symbols “USO” on April 10, 2006, “UNG” on April 18, 2007, “USL” on December 6, 2007 and “UGA” on February 26, 2008, respectively. As a result of the acquisition of the AMEX by NYSE Euronext, each of USO’s, UNG’s, USL’s and UGA’s shares commenced trading on the NYSE Arca on November 25, 2008. USCF is also the general partner of the United States 12 Month Natural Gas Fund, LP (“UNL”), which listed its limited partnership shares on the NYSE Arca under the ticker symbol “UNL” on November 18, 2009. USCF previously served as the general partner for the United States Short Oil Fund, LP (“DNO”) and the United States Diesel-Heating Oil Fund, LP (“UHN”), both of which were liquidated in 2018. USCF is also the sponsor of the United States Commodity Index Fund (“USCI”), the United States Copper Index Fund (“CPER") and the USCF Crescent Crypto Index Fund (“XBET”), each a series of the United States Commodity Index Funds Trust (“USCIFT”). USCF previously served as the sponsor for the United States Agricultural Index Fund (“USAG") a series of USCIFT which was liquidated in 2018. A registration statement that had been previously filed for XBET was withdrawn on June 25, 2020. USCI and CPER listed their shares on the NYSE Arca under the ticker symbols “USCI” on August 10, 2010 and “CPER” on November 15, 2011, respectively. In addition, USCF was the sponsor of the USCF Funds Trust, a Delaware statutory trust, and each of its series, the United States 3x Oil Fund (“USOU”) and the United States 3x Short Oil Fund (“USOD”), which listed their shares on the NYSE Arca on July 20, 2017 under the ticker symbols "USOU" and "USOD", respectively. Each of USOU and USOD liquidated all of its assets and distributed cash pro rata to all remaining shareholders in December 2019. USO, UNG, UGA, UNL, USL, BNO, USCI and CPER are referred to collectively herein as the “Related Public Funds.” BNO issues shares to certain authorized purchasers (“Authorized Participants”) by offering baskets consisting of 50,000 shares (“Creation Baskets”) through ALPS Distributors, Inc., as the marketing agent (the “Marketing Agent”). The purchase price for a Creation Basket is based upon the NAV of a share calculated shortly after the close of the core trading session on the NYSE Arca on the day the order to create the basket is properly received. Authorized Participants pay BNO a $350 transaction fee for each order placed to create one or more Creation Baskets or to redeem one or more baskets (“Redemption Baskets”), consisting of 50,000 shares. Shares may be purchased or sold on a nationally recognized securities exchange in smaller increments than a Creation Basket or Redemption Basket. Shares purchased or sold on a nationally recognized securities exchange are not purchased or sold at the per share NAV of BNO but rather at market prices quoted on such exchange. In May 2010, BNO initially registered 50,000,000 shares on Form S-1 with the U.S. Securities and Exchange Commission (the “SEC”). On June 2, 2010, BNO listed its shares on the NYSE Arca under the ticker symbol “BNO”. BNO established its’ initial per share NAV by setting the price at $50.00 and issued 200,000 shares in exchange for $10,000,000. BNO also commenced investment operations on June 2, 2010, by purchasing Futures Contracts traded on the ICE Futures Europe based on Brent crude oil. As of September 30, 2020, BNO had registered a total of 250,000,000 shares. On April 20, 2020, BNO registered an additional 50,000,000 shares and 150,000,000 shares registered on June 11, 2020. The accompanying unaudited condensed financial statements have been prepared in accordance with Rule 10-01 of Regulation S-X promulgated by the SEC and, therefore, do not include all information and footnote disclosure required under generally accepted accounting principles in the United States of America (“U.S. GAAP”). The financial information included herein is unaudited; however, such financial information reflects all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of USCF, necessary for the fair presentation of the condensed financial statements for the interim period. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The condensed financial statements have been prepared in conformity with U.S. GAAP as detailed in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification. BNO is an investment company and follows the accounting and reporting guidance in FASB Topic 946. Revenue Recognition Commodity futures contracts, forward contracts, physical commodities and related options are recorded on the trade date. All such transactions are recorded on the identified cost basis and marked to market daily. Unrealized gains or losses on open contracts are reflected in the condensed statements of financial condition and represent the difference between the original contract amount and the market value (as determined by exchange settlement prices for futures contracts and related options and cash dealer prices at a predetermined time for forward contracts, physical commodities, and their related options) as of the last business day of the year or as of the last date of the condensed financial statements. Changes in the unrealized gains or losses between periods are reflected in the condensed statements of operations. BNO earns income on funds held at the custodian or futures commission merchants (“FCMs”) at prevailing market rates earned on such investments. Brokerage Commissions Brokerage commissions on all open commodity futures contracts are accrued on a full-turn basis. Income Taxes BNO is not subject to federal income taxes; each partner reports his/her allocable share of income, gain, loss deductions or credits on his/her own income tax return. In accordance with U.S. GAAP, BNO is required to determine whether a tax position is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any tax related appeals or litigation processes, based on the technical merits of the position. BNO files an income tax return in the U.S. federal jurisdiction and may file income tax returns in various U.S. states. BNO is not subject to income tax return examinations by major taxing authorities for years before 2017. The tax benefit recognized is measured as the largest amount of benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. De-recognition of a tax benefit previously recognized results in BNO recording a tax liability that reduces net assets. However, BNO’s conclusions regarding this policy may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analysis of and changes to tax laws, regulations and interpretations thereof. BNO recognizes interest accrued related to unrecognized tax benefits and penalties related to unrecognized tax benefits in income tax fees payable, if assessed. No interest expense or penalties have been recognized as of and for the period ended September 30, 2020. Creations and Redemptions Authorized Participants may purchase Creation Baskets or redeem Redemption Baskets only in blocks of 50,000 shares at a price equal to the NAV of the shares calculated shortly after the close of the core trading session on the NYSE Arca on the day the order is placed. BNO receives or pays the proceeds from shares sold or redeemed within two business days after the trade date of the purchase or redemption. The amounts due from Authorized Participants are reflected in BNO’s condensed statements of financial condition as receivable for shares sold and amounts payable to Authorized Participants upon redemption are reflected as payable for shares redeemed. Authorized Participants pay BNO a $350 transaction fee for each order placed to create one or more Creation Baskets or to redeem one or more Redemption Baskets. Partnership Capital and Allocation of Partnership Income and Losses Profit or loss shall be allocated among the partners of BNO in proportion to the number of shares each partner holds as of the close of each month. USCF may revise, alter or otherwise modify this method of allocation as described in the LP Agreement. Calculation of Per Share NAV BNO’s per share NAV is calculated on each NYSE Arca trading day by taking the current market value of its total assets, subtracting any liabilities and dividing that amount by the total number of shares outstanding. BNO uses the closing price for the contracts on the relevant exchange on that day to determine the value of contracts held on such exchange. Net Income (Loss) Per Share Net income (loss) per share is the difference between the per share NAV at the beginning of each period and at the end of each period. The weighted average number of shares outstanding was computed for purposes of disclosing net income (loss) per weighted average share. The weighted average shares are equal to the number of shares outstanding at the end of the period, adjusted proportionately for shares added and redeemed based on the amount of time the shares were outstanding during such period. There were no shares held by USCF at September 30, 2020. Offering Costs Offering costs incurred in connection with the registration of additional shares after the initial registration of shares are borne by BNO. These costs include registration fees paid to regulatory agencies and all legal, accounting, printing and other expenses associated with such offerings. These costs are accounted for as a deferred charge and thereafter amortized to expense over twelve months on a straight-line basis or a shorter period if warranted. Cash Equivalents Cash equivalents include money market funds and overnight deposits or time deposits with original maturity dates of six months or less. Reclassification Certain amounts in the accompanying condensed financial statements were reclassified to conform to the current presentation. Use of Estimates The preparation of condensed financial statements in conformity with U.S. GAAP requires USCF to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financial statements, and the reported amounts of the revenue and expenses during the reporting period. Actual results may differ from those estimates and assumptions. |
FEES PAID BY THE FUND AND RELAT
FEES PAID BY THE FUND AND RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2020 | |
FEES PAID BY THE FUND AND RELATED PARTY TRANSACTIONS | |
FEES PAID BY THE FUND AND RELATED PARTY TRANSACTIONS | NOTE 3 — FEES PAID BY THE FUNDS AND RELATED PARTY TRANSACTIONS USCF Management Fee Under the LP Agreement, USCF is responsible for investing the assets of BNO in accordance with the objectives and policies of BNO. In addition, USCF has arranged for one or more third parties to provide administrative, custody, accounting, transfer agency and other necessary services to BNO. For these services, BNO is contractually obligated to pay USCF a fee, which is paid monthly, equal to 0.75% per annum of average daily total net assets. Ongoing Registration Fees and Other Offering Expenses BNO pays all costs and expenses associated with the ongoing registration of its shares subsequent to the initial offering. These costs include registration or other fees paid to regulatory agencies in connection with the offer and sale of shares, and all legal, accounting, printing and other expenses associated with such offer and sale. For the nine months ended September 30, 2020 and 2019, BNO incurred $168,970 and $0, respectively, in registration fees and offering expenses. Independent Directors’ and Officers’ Expenses BNO is responsible for paying its portion of the directors’ and officers’ liability insurance for BNO and the Related Public Funds and the fees and expenses of the independent directors who also serve as audit committee members of BNO and the Related Public Funds. BNO shares the fees and expenses on a pro rata basis with each Related Public Fund, as described above, based on the relative assets of each Related Public Fund computed on a daily basis. These fees and expenses for the year ending December 31, 2020 are estimated to be a total of $35,000 for BNO and, in the aggregate for BNO and the Related Public Funds, $574,000. Investor Tax Reporting Cost The fees and expenses associated with BNO’s audit expenses and tax accounting and reporting requirements are paid by BNO. These costs are estimated to be $250,000 for the year ending December 31, 2020. Tax reporting costs fluctuate between years due to the number of shareholders during any given year. Other Expenses and Fees and Expense Waivers In addition to the fees described above, BNO pays all brokerage fees and other expenses in connection with the operation of BNO, excluding costs and expenses paid by USCF as outlined in Note 4 – Contracts and Agreements below. USCF paid certain expenses on a discretionary basis typically borne by BNO, where expenses exceed 0.15% (15 basis points) of BNO’s NAV, on an annualized basis. USCF has no obligation to continue such payments into subsequent periods. For the nine months ended September 30, 2020, USCF waived $(497,324) of BNO’s expenses. This voluntary expense waiver is in addition to those amounts USCF is contractually obligated to pay as described in Note 4 – Contracts and Agreements. |
CONTRACTS AND AGREEMENTS
CONTRACTS AND AGREEMENTS | 9 Months Ended |
Sep. 30, 2020 | |
CONTRACTS AND AGREEMENTS | |
CONTRACTS AND AGREEMENTS | NOTE 4 — CONTRACTS AND AGREEMENTS Marketing Agent Agreement BNO is party to a marketing agent agreement, dated as of March 31, 2010, as amended from time to time, with the Marketing Agent and USCF, whereby the Marketing Agent provides certain marketing services for BNO as outlined in the agreement. The fee of the Marketing Agent, which is borne by USCF, is equal to 0.06% on BNO’s assets up to $3 billion and 0.04% on BNO’s assets in excess of $3 billion. In no event may the aggregate compensation paid to the Marketing Agent and any affiliate of USCF for distribution-related services exceed 10% of the gross proceeds of BNO’s offering. The above fee does not include website construction and development, which are also borne by USCF. Custody, Transfer Agency and Fund Administration and Accounting Services Agreements USCF engaged The Bank of New York Mellon, a New York corporation authorized to do a banking business ("BNY Mellon"), to provide BNO and each of the Related Public Funds with certain custodial, administrative and accounting, and transfer agency services, pursuant to the following agreements with BNY Mellon dated as of March 20, 2020 (together, the "BNY Mellon Agreements"), which were effective as of April 1, 2020: (i) a Custody Agreement; (ii) a Fund Administration and Accounting Agreement; and (iii) a Transfer Agency and Service Agreement. USCF pays the fees of BNY Mellon for its services under the BNY Mellon Agreements and such fees are determined by the parties from time to time. Brown Brothers Harriman and Co. ("BBH&Co.") previously served as the Administrator, Custodian, Transfer Agent and Fund Accounting Agent for BNO and the Related Public Funds prior to BNY Mellon commencing such services on April 1, 2020. Certain fund accounting and fund administration services rendered by BBH&Co. to BNO and the Related Public Funds terminated on May 31, 2020 to allow for the transition to BNY Mellon. Brokerage and Futures Commission Merchant Agreements BNO entered into a brokerage agreement with RBC Capital Markets LLC (“RBC”) to serve as BNO’s FCM effective October 10, 2013. In addition, BNO entered into a Commodity Futures Customer Agreement dated as of May 28, 2020 with RCG Division of Marex Spectron ("RCG") and a Customer Agreement with ED & F Man Capital Markets Inc. ("MCM") on June 5, 2020, pursuant to which RCG and MCM each act as an FCM for BNO. The agreements with BNO’s FCMs require the FCMs to provide services to BNO in connection with the purchase and sale of Futures Contracts and Other -Related Investments that may be purchased and sold by or through the applicable FCM for BNO’s account. In accordance with the FCM agreements, BNO pays each FCM commissions of approximately $7 to $8 per round-turn trade, including applicable exchange, clearing and NFA fees for Futures Contracts and options on Futures Contracts. Such fees include those incurred when purchasing Futures Contracts and options on Futures Contracts when BNO issues shares as a result of a Creation Basket, as well as fees incurred when selling Futures Contracts and options on Futures Contracts when BNO redeems shares as a result of a Redemption Basket. Such fees are also incurred when Futures Contracts and options on Futures Contracts are purchased or redeemed for the purpose of rebalancing the portfolio. BNO also incurs commissions to brokers for the purchase and sale of Futures Contracts, Other -Related Investments or short-term obligations of the United States of two years or less (“Treasuries”). Nine months ended Nine months ended September 30, 2020 September 30, 2019 Total commissions accrued to brokers $ 413,504 $ 77,908 Total commissions as annualized percentage of average total net assets 0.20 % 0.12 % Commissions accrued as a result of rebalancing $ 396,633 $ 76,209 Percentage of commissions accrued as a result of rebalancing 95.92 % 97.82 % XCommissions accrued as a result of creation and redemption activity $ 16,871 $ 1,699 Percentage of commissions accrued as a result of creation and redemption activity 4.08 % 2.18 % The increase in total commissions accrued to brokers for the nine months ended September 30, 2020, compared to the nine months ended September 30, 2019, was due primarily to a higher number of Brent oil futures contracts being held and traded. |
FINANCIAL INSTRUMENTS, OFF-BALA
FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES | |
FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES | NOTE 5 — FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES BNO may engage in the trading of futures contracts, options on futures contracts, cleared swaps and OTC swaps (collectively, “derivatives”). BNO is exposed to both market risk, which is the risk arising from changes in the market value of the contracts, and credit risk, which is the risk of failure by another party to perform according to the terms of a contract. BNO may enter into futures contracts, options on futures contracts, cleared swaps, and OTC-swaps to gain exposure to changes in the value of an underlying commodity. A futures contract obligates the seller to deliver (and the purchaser to accept) the future delivery of a specified quantity and type of a commodity at a specified time and place. Some futures contracts may call for physical delivery of the asset, while others are settled in cash. The contractual obligations of a buyer or seller may generally be satisfied by taking or making physical delivery of the underlying commodity or by making an offsetting sale or purchase of an identical futures contract on the same or linked exchange before the designated date of delivery. Cleared swaps are agreements that are eligible to be cleared by a clearinghouse, e.g., ICE Clear Europe, and provide the efficiencies and benefits that centralized clearing on an exchange offers to traders of futures contracts, including credit risk intermediation and the ability to offset positions initiated with different counterparties. OTC swaps are entered into between two parties in private contracts. In an OTC swap, each party bears credit risk to the other party, i.e., the risk that the other party may not be able to perform its obligations under the OTC swap. The purchase and sale of futures contracts, options on futures contracts and cleared swaps require margin deposits with an FCM. Additional deposits may be necessary for any loss on contract value. The Commodity Exchange Act requires an FCM to segregate all customer transactions and assets from the FCM’s proprietary activities. To reduce the credit risk that arises in connection with OTC swaps, BNO will generally enter into an agreement with each counterparty based on the Master Agreement published by the International Swaps and Derivatives Association, Inc., which provides for the netting of its overall exposure to its counterparty. The Master Agreement is negotiated as between the parties and would address, among other things, the exchange of margin between the parties. Futures contracts, options on futures contracts and cleared swaps involve, to varying degrees, elements of market risk (specifically commodity price risk) and exposure to loss in excess of the amount of variation margin. The face or contract amounts reflect the extent of the total exposure BNO has in the particular classes of instruments. Additional risks associated with the use of futures contracts are an imperfect correlation between movements in the price of the futures contracts and the market value of the underlying securities and the possibility of an illiquid market for a futures contract. Buying and selling options on futures contracts exposes investors to the risks of purchasing or selling futures contracts. As to OTC swaps, valuing OTC derivatives is less certain than valuing actively traded financial instruments such as exchange-traded futures contracts and securities or cleared swaps, because the price and terms on which such OTC derivatives are entered into or can be terminated are individually negotiated, and those prices and terms may not reflect the best price or terms available from other sources. In addition, while market makers and dealers generally quote indicative prices or terms for entering into or terminating OTC contracts, they typically are not contractually obligated to do so, particularly if they are not a party to the transaction. As a result, it may be difficult to obtain an independent value for an outstanding OTC derivatives transaction. All of the futures contracts held by BNO through September 30, 2020 were exchange-traded. The risks associated with exchange-traded contracts are generally perceived to be less than those associated with OTC swaps since, in OTC swaps, a party must rely solely on the credit of its respective individual counterparties. However, in the future, if BNO were to enter into non-exchange traded contracts, it would be subject to the credit risk associated with counterparty non-performance. The credit risk from counterparty non-performance associated with such instruments is the net unrealized gain, if any, on the transaction. BNO has credit risk under its futures contracts since the sole counterparty to all domestic and foreign futures contracts is the clearinghouse for the exchange on which the relevant contracts are traded. In addition, BNO bears the risk of financial failure by the clearing broker. A novel strain of coronavirus (COVID-19) outbreak was declared a pandemic by the World Health Organization on March 11, 2020. The situation is evolving with various cities and countries around the world responding in different ways to address the outbreak. There are direct and indirect economic effects developing for various industries and individual companies throughout the world. Management will continue to monitor the impact COVID-19 has on the Fund and reflect the consequences as appropriate in the Fund’s accounting and financial reporting. The recent pandemic spread of the novel coronavirus and related geopolitical events could lead to increased market volatility, disruption to U.S. and world economies and markets and may have significant adverse effects on the Fund and its investments. BNO’s cash and other property, such as Treasuries, deposited with its FCMs are considered commingled with all other customer funds, subject to such FCM’s segregation requirements. In the event of an FCM’s insolvency, recovery may be limited to a pro rata share of segregated funds available. It is possible that the recovered amount could be less than the total of cash and other property deposited. The insolvency of an FCM could result in the complete loss of BNO’s assets posted with that FCM; however, the majority of BNO’s assets are held in investments in Treasuries, cash and/or cash equivalents with BNO’s custodian and would not be impacted by the insolvency of an FCM. The failure or insolvency of BNO’s custodian, however, could result in a substantial loss of BNO’s assets. USCF invests a portion of BNO’s cash in money market funds that seek to maintain a stable per share NAV. BNO is exposed to any risk of loss associated with an investment in such money market funds. As of September 30, 2020 and December 31, 2019, BNO held investments in money market funds in the amounts of $30,347,000 and $23,000,000, respectively. BNO also holds cash deposits with its custodian. As of September 30, 2020 and December 31, 2019, BNO held cash deposits and investments in Treasuries in the amounts of $333,177,257 and $60,603,440, respectively, with the custodian and FCMs. Some or all of these amounts may be subject to loss should BNO’s custodian and/or FCMs cease operations. For derivatives, risks arise from changes in the market value of the contracts. Theoretically, BNO is exposed to market risk equal to the value of futures contracts purchased and unlimited liability on such contracts sold short or that the value of the futures contract could fall below zero. As both a buyer and a seller of options, BNO pays or receives a premium at the outset and then bears the risk of unfavorable changes in the price of the contract underlying the option. BNO’s policy is to continuously monitor its exposure to market and counterparty risk through the use of a variety of financial, position and credit exposure reporting controls and procedures. In addition, BNO has a policy of requiring review of the credit standing of each broker or counterparty with which it conducts business. The financial instruments held by BNO are reported in its condensed statements of financial condition at market or fair value, or at carrying amounts that approximate fair value, because of their highly liquid nature and short-term maturity. |
FINANCIAL HIGHLIGHTS
FINANCIAL HIGHLIGHTS | 9 Months Ended |
Sep. 30, 2020 | |
FINANCIAL HIGHLIGHTS | |
FINANCIAL HIGHLIGHTS | NOTE 6 — FINANCIAL HIGHLIGHTS The following table presents per share performance data and other supplemental financial data for the three and nine months ended September 30, 2020 and 2019 for the shareholders. This information has been derived from information presented in the condensed financial statements. Three months ended Three months ended Nine months ended Nine months ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Per Share Operating Performance: Net asset value, beginning of period $ 10.77 $ 19.13 $ 20.91 $ 15.18 Total income (loss) (0.04) (1.00) (10.12) 3.04 Total expenses (0.03) (0.04) (0.09) (0.13) Net increase (decrease) in net asset value (0.07) (1.04) (10.21) 2.91 Net asset value, end of period $ 10.70 $ 18.09 $ 10.70 $ 18.09 Total Return (0.65) % (5.44) % (48.83) % 19.17 % Ratios to Average Net Assets Total income (loss) (0.08) % (5.42) % 20.96 % 17.44 % Management fees * 0.75 % 0.75 % 0.75 % 0.75 % Total expenses excluding management fees * 0.37 % 0.31 % 0.40 % 0.22 % Expense waived * (0.22) % (0.16) % (0.25) % (0.07) % Net expense excluding management fees * 0.15 % 0.15 % 0.15 % 0.15 % Net income (loss) (0.31) % (5.64) % 20.28 % 16.77 % * Annualized. Total returns are calculated based on the change in value during the period. An individual shareholder’s total return and ratio may vary from the above total returns and ratios based on the timing of contributions to and withdrawals from BNO. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2020 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 7 — FAIR VALUE OF FINANCIAL INSTRUMENTS BNO values its investments in accordance with Accounting Standards Codification 820 – Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurement. The changes to past practice resulting from the application of ASC 820 relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurement. ASC 820 establishes a fair value hierarchy that distinguishes between: (1) market participant assumptions developed based on market data obtained from sources independent of BNO (observable inputs) and (2) BNO’s own assumptions about market participant assumptions developed based on the best information available under the circumstances (unobservable inputs). The three levels defined by the ASC 820 hierarchy are as follows: Level I – Quoted prices (unadjusted) in active markets for identical Level II – Inputs other than quoted prices included within Level I that are observable for the asset or liability, either directly or indirectly. Level II assets include the following: quoted prices for similar Level III – Unobservable pricing input at the measurement date for the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available. In some instances, the inputs used to measure fair value might fall within different levels of the fair value hierarchy. The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest input level that is significant to the fair value measurement in its entirety. The following table summarizes the valuation of BNO’s securities at September 30, 2020 using the fair value hierarchy: At September 30, 2020 Total Level I Level II Level III Short-Term Investments $ 30,347,000 $ 30,347,000 $ — $ — Exchange-Traded Futures Contracts Foreign Contracts (6,467,200) (6,467,200) — — The following table summarizes the valuation of BNO’s securities at December 31, 2019 using the fair value hierarchy: At December 31, 2019 Total Level I Level II Level III Short-Term Investments $ 78,785,251 $ 78,785,251 $ — $ — Exchange-Traded Futures Contracts Foreign Contracts 1,161,610 1,161,610 — — During the year ended December 31, 2019, there were no transfers between Level I and Level II. Effective January 1, 2009, BNO adopted the provisions of Accounting Standards Codification 815 – Derivatives and Hedging, which require presentation of qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts and gains and losses on derivatives. Fair Value of Derivative Instruments Condensed Fair Value Fair Value Statements of Financial at September 30, at December 31, Derivatives not Accounted for as Hedging Instruments Condition Location 2020 2019 Futures - Commodity Contracts Assets $ (6,467,200) $ 1,161,610 The Effect of Derivative Instruments on the Condensed Statements of Operations For the nine months ended For the nine months ended September 30, 2020 September 30, 2019 Change in Change in Location of Realized Unrealized Realized Unrealized Gain (Loss) gain (Loss) Gain (Loss) on Gain (Loss) Gain (Loss) on on Derivatives on Derivatives Derivatives in Derivatives Derivatives Recognized in Recognized in Recognized in Recognized in Recognized in Derivatives not Accounted for as Hedging Instruments Income Income Income Income Income Futures - Commodity Contracts Realized gain (loss) on closed positions $ 63,479,920 $ 14,459,540 Change in unrealized gain (loss) on open positions $ (7,628,810) $ (341,900) |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2020 | |
RECENT ACCOUNTING PRONOUNCEMENTS | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 8 — RECENT ACCOUNTING PRONOUNCEMENTS In August 2018, the FASB issued Accounting Standards Update ("ASU") No. 2018-13, which changes certain fair value measurement disclosure requirements. The new ASU, in addition to other modifications and additions, removes the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and the Funds’ policy for the timing of transfers between levels. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Fund has evaluated the implications of certain provisions of the ASU and has determined that there will be no material impacts to the financial statements. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2020 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 9 — SUBSEQUENT EVENTS The Trust has performed an evaluation of subsequent events through the date the condensed financial statements were issued. This evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The condensed financial statements have been prepared in conformity with U.S. GAAP as detailed in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification. BNO is an investment company and follows the accounting and reporting guidance in FASB Topic 946. |
Revenue Recognition | Revenue Recognition Commodity futures contracts, forward contracts, physical commodities and related options are recorded on the trade date. All such transactions are recorded on the identified cost basis and marked to market daily. Unrealized gains or losses on open contracts are reflected in the condensed statements of financial condition and represent the difference between the original contract amount and the market value (as determined by exchange settlement prices for futures contracts and related options and cash dealer prices at a predetermined time for forward contracts, physical commodities, and their related options) as of the last business day of the year or as of the last date of the condensed financial statements. Changes in the unrealized gains or losses between periods are reflected in the condensed statements of operations. BNO earns income on funds held at the custodian or futures commission merchants (“FCMs”) at prevailing market rates earned on such investments. |
Brokerage Commissions | Brokerage Commissions Brokerage commissions on all open commodity futures contracts are accrued on a full-turn basis. |
Income Taxes | Income Taxes BNO is not subject to federal income taxes; each partner reports his/her allocable share of income, gain, loss deductions or credits on his/her own income tax return. In accordance with U.S. GAAP, BNO is required to determine whether a tax position is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any tax related appeals or litigation processes, based on the technical merits of the position. BNO files an income tax return in the U.S. federal jurisdiction and may file income tax returns in various U.S. states. BNO is not subject to income tax return examinations by major taxing authorities for years before 2017. The tax benefit recognized is measured as the largest amount of benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. De-recognition of a tax benefit previously recognized results in BNO recording a tax liability that reduces net assets. However, BNO’s conclusions regarding this policy may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analysis of and changes to tax laws, regulations and interpretations thereof. BNO recognizes interest accrued related to unrecognized tax benefits and penalties related to unrecognized tax benefits in income tax fees payable, if assessed. No interest expense or penalties have been recognized as of and for the period ended September 30, 2020. |
Creations and Redemptions | Creations and Redemptions Authorized Participants may purchase Creation Baskets or redeem Redemption Baskets only in blocks of 50,000 shares at a price equal to the NAV of the shares calculated shortly after the close of the core trading session on the NYSE Arca on the day the order is placed. BNO receives or pays the proceeds from shares sold or redeemed within two business days after the trade date of the purchase or redemption. The amounts due from Authorized Participants are reflected in BNO’s condensed statements of financial condition as receivable for shares sold and amounts payable to Authorized Participants upon redemption are reflected as payable for shares redeemed. Authorized Participants pay BNO a $350 transaction fee for each order placed to create one or more Creation Baskets or to redeem one or more Redemption Baskets. |
Partnership Capital and Allocation of Partnership Income and Losses | Partnership Capital and Allocation of Partnership Income and Losses Profit or loss shall be allocated among the partners of BNO in proportion to the number of shares each partner holds as of the close of each month. USCF may revise, alter or otherwise modify this method of allocation as described in the LP Agreement. |
Calculation of Per Share NAV | Calculation of Per Share NAV BNO’s per share NAV is calculated on each NYSE Arca trading day by taking the current market value of its total assets, subtracting any liabilities and dividing that amount by the total number of shares outstanding. BNO uses the closing price for the contracts on the relevant exchange on that day to determine the value of contracts held on such exchange. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Net income (loss) per share is the difference between the per share NAV at the beginning of each period and at the end of each period. The weighted average number of shares outstanding was computed for purposes of disclosing net income (loss) per weighted average share. The weighted average shares are equal to the number of shares outstanding at the end of the period, adjusted proportionately for shares added and redeemed based on the amount of time the shares were outstanding during such period. There were no shares held by USCF at September 30, 2020. |
Offering Costs | Offering Costs Offering costs incurred in connection with the registration of additional shares after the initial registration of shares are borne by BNO. These costs include registration fees paid to regulatory agencies and all legal, accounting, printing and other expenses associated with such offerings. These costs are accounted for as a deferred charge and thereafter amortized to expense over twelve months on a straight-line basis or a shorter period if warranted. |
Cash Equivalents | Cash Equivalents Cash equivalents include money market funds and overnight deposits or time deposits with original maturity dates of six months or less. |
Reclassification | Reclassification Certain amounts in the accompanying condensed financial statements were reclassified to conform to the current presentation. |
Use of Estimates | Use of Estimates The preparation of condensed financial statements in conformity with U.S. GAAP requires USCF to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financial statements, and the reported amounts of the revenue and expenses during the reporting period. Actual results may differ from those estimates and assumptions. |
CONTRACTS AND AGREEMENTS (Table
CONTRACTS AND AGREEMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
CONTRACTS AND AGREEMENTS | |
Schedule of brokerage commissions | Nine months ended Nine months ended September 30, 2020 September 30, 2019 Total commissions accrued to brokers $ 413,504 $ 77,908 Total commissions as annualized percentage of average total net assets 0.20 % 0.12 % Commissions accrued as a result of rebalancing $ 396,633 $ 76,209 Percentage of commissions accrued as a result of rebalancing 95.92 % 97.82 % XCommissions accrued as a result of creation and redemption activity $ 16,871 $ 1,699 Percentage of commissions accrued as a result of creation and redemption activity 4.08 % 2.18 % |
FINANCIAL HIGHLIGHTS (Tables)
FINANCIAL HIGHLIGHTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
FINANCIAL HIGHLIGHTS | |
Schedule of per share performance data and other supplemental financial data | The following table presents per share performance data and other supplemental financial data for the three and nine months ended September 30, 2020 and 2019 for the shareholders. This information has been derived from information presented in the condensed financial statements. Three months ended Three months ended Nine months ended Nine months ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Per Share Operating Performance: Net asset value, beginning of period $ 10.77 $ 19.13 $ 20.91 $ 15.18 Total income (loss) (0.04) (1.00) (10.12) 3.04 Total expenses (0.03) (0.04) (0.09) (0.13) Net increase (decrease) in net asset value (0.07) (1.04) (10.21) 2.91 Net asset value, end of period $ 10.70 $ 18.09 $ 10.70 $ 18.09 Total Return (0.65) % (5.44) % (48.83) % 19.17 % Ratios to Average Net Assets Total income (loss) (0.08) % (5.42) % 20.96 % 17.44 % Management fees * 0.75 % 0.75 % 0.75 % 0.75 % Total expenses excluding management fees * 0.37 % 0.31 % 0.40 % 0.22 % Expense waived * (0.22) % (0.16) % (0.25) % (0.07) % Net expense excluding management fees * 0.15 % 0.15 % 0.15 % 0.15 % Net income (loss) (0.31) % (5.64) % 20.28 % 16.77 % * Annualized. |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Schedule of valuation of securities using fair value hierarchy | The following table summarizes the valuation of BNO’s securities at September 30, 2020 using the fair value hierarchy: At September 30, 2020 Total Level I Level II Level III Short-Term Investments $ 30,347,000 $ 30,347,000 $ — $ — Exchange-Traded Futures Contracts Foreign Contracts (6,467,200) (6,467,200) — — The following table summarizes the valuation of BNO’s securities at December 31, 2019 using the fair value hierarchy: At December 31, 2019 Total Level I Level II Level III Short-Term Investments $ 78,785,251 $ 78,785,251 $ — $ — Exchange-Traded Futures Contracts Foreign Contracts 1,161,610 1,161,610 — — |
Schedule of fair value of derivative instruments | Fair Value of Derivative Instruments Condensed Fair Value Fair Value Statements of Financial at September 30, at December 31, Derivatives not Accounted for as Hedging Instruments Condition Location 2020 2019 Futures - Commodity Contracts Assets $ (6,467,200) $ 1,161,610 |
Schedule of effect of derivative instruments on condensed statements of operations | The Effect of Derivative Instruments on the Condensed Statements of Operations For the nine months ended For the nine months ended September 30, 2020 September 30, 2019 Change in Change in Location of Realized Unrealized Realized Unrealized Gain (Loss) gain (Loss) Gain (Loss) on Gain (Loss) Gain (Loss) on on Derivatives on Derivatives Derivatives in Derivatives Derivatives Recognized in Recognized in Recognized in Recognized in Recognized in Derivatives not Accounted for as Hedging Instruments Income Income Income Income Income Futures - Commodity Contracts Realized gain (loss) on closed positions $ 63,479,920 $ 14,459,540 Change in unrealized gain (loss) on open positions $ (7,628,810) $ (341,900) |
ORGANIZATION AND BUSINESS (Deta
ORGANIZATION AND BUSINESS (Details) | 1 Months Ended | 9 Months Ended | ||||||||
Jun. 02, 2010USD ($)$ / sharesshares | Sep. 30, 2020USD ($)contract$ / sharesshares | Jun. 30, 2020$ / shares | Jun. 11, 2020shares | Apr. 20, 2020shares | Dec. 31, 2019$ / shares | Sep. 30, 2019$ / shares | Jun. 30, 2019$ / shares | Dec. 31, 2018$ / shares | May 31, 2010shares | |
Number of successive valuation days | 30 days | |||||||||
Average daily percentage change in the price of the Benchmark Futures Contract considered | 10.00% | |||||||||
Units issued during period to authorized purchasers through distributors | 50,000 | |||||||||
Transaction fee | $ | $ 350 | |||||||||
Initially registered units of entity with sec | 50,000,000 | |||||||||
Net asset value per unit | $ / shares | $ 50 | $ 10.70 | $ 10.77 | $ 20.91 | $ 18.09 | $ 19.13 | $ 15.18 | |||
Initial stock units issued | 200,000 | |||||||||
Initial units value issued | $ | $ 10,000,000 | |||||||||
Total units registered of entity | 250,000,000 | 150,000,000 | 50,000,000 | |||||||
Number of units per baskets | 50,000 | |||||||||
ICE Brent Crude Oil Futures CO December 2019 Contracts Expiring October 2019 [Member] | ||||||||||
Number of contracts | contract | 8,449 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 9 Months Ended |
Sep. 30, 2020USD ($)shares | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Unrecognized tax benefits and penalties | $ 0 |
Number of units per baskets | shares | 50,000 |
Transaction fee | $ 350 |
FEES PAID BY THE FUND AND REL_2
FEES PAID BY THE FUND AND RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2020 | |
Percentage of management fee in average daily total net assets | 0.75% | ||||
Registration fees and offering expenses | $ 87,470 | $ 0 | $ 168,970 | $ 0 | |
Expenses write off | $ (497,324) | ||||
Forecast [Member] | |||||
Estimated investor tax reporting cost | $ 250,000 | ||||
Percentage of fees and other waivers expense | 0.15% | ||||
BNO [Member] | Forecast [Member] | |||||
Estimated directors fees and expenses | $ 35,000 | ||||
BNO and Related Public Fund [Member] | Forecast [Member] | |||||
Estimated directors fees and expenses | $ 574,000 |
CONTRACTS AND AGREEMENTS - Brok
CONTRACTS AND AGREEMENTS - Brokerage Commissions (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Brokerage commissions | $ 161,652 | $ 26,184 | $ 413,504 | $ 77,908 |
Percentage Of Average Daily Net Assets | 0.20% | 0.12% | 0.20% | 0.12% |
Rebalancing Investments Transaction [Member] | ||||
Brokerage commissions | $ 396,633 | $ 76,209 | ||
Percentage Of Average Daily Net Assets | 95.92% | 97.82% | 95.92% | 97.82% |
Creation And Redemption Activity [Member] | ||||
Brokerage commissions | $ 16,871 | $ 1,699 | ||
Percentage Of Average Daily Net Assets | 4.08% | 2.18% | 4.08% | 2.18% |
CONTRACTS AND AGREEMENTS - Addi
CONTRACTS AND AGREEMENTS - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Maximum [Member] | |
Commission per round turn | $ 8 |
Minimum [Member] | |
Commission per round turn | $ 7 |
First $500 Million Of The Related Public Funds' Combined Net Assets [Member] | |
Fee percentage | 0.06% |
Marketing Agreement [Member] | BNO's assets up to $3 billion [Member] | Maximum [Member] | |
Base amount for determining fee percentage | $ 3,000,000,000 |
Marketing Agreement [Member] | BNO's assets in excess of $3 billion [Member] | |
Fee percentage | 0.04% |
Marketing Agreement [Member] | BNO's assets in excess of $3 billion [Member] | Maximum [Member] | |
Fee percentage | 10.00% |
Marketing Agreement [Member] | BNO's assets in excess of $3 billion [Member] | Minimum [Member] | |
Base amount for determining fee percentage | $ 3,000,000,000 |
FINANCIAL INSTRUMENTS, OFF-BA_2
FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES | ||
Money market funds | $ 30,347,000 | $ 23,000,000 |
cash deposit and investment in treasury | $ 333,177,257 | $ 60,603,440 |
FINANCIAL HIGHLIGHTS (Details)
FINANCIAL HIGHLIGHTS (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Per Share Operating Performance: | ||||
Net asset value, beginning of period | $ 10.77 | $ 19.13 | $ 20.91 | $ 15.18 |
Total income (loss) | (0.04) | (1) | (10.12) | 3.04 |
Total expenses | (0.03) | (0.04) | (0.09) | (0.13) |
Net increase (decrease) in net asset value | (0.07) | (1.04) | (10.21) | 2.91 |
Net asset value, end of period | $ 10.70 | $ 18.09 | $ 10.70 | $ 18.09 |
Total Return | (0.65%) | (5.44%) | (48.83%) | 19.17% |
Ratios to Average Net Assets | ||||
Total income (loss) | (0.08%) | (5.42%) | 20.96% | 17.44% |
Management fees | 0.75% | 0.75% | 0.75% | 0.75% |
Total expenses excluding management fees | 0.37% | 0.31% | 0.40% | 0.22% |
Expense waived | (0.22%) | (0.16%) | (0.25%) | (0.07%) |
Net expense excluding management fees | 0.15% | 0.15% | 0.15% | 0.15% |
Net income (loss) | (0.31%) | (5.64%) | 20.28% | 16.77% |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS - Valuation of BNO'S Securities (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Exchange-Traded Futures Contracts | ||
Foreign Contracts | $ (6,467,200) | $ 1,161,610 |
Foreign Contracts [Member] | ||
Short-Term Investments | 78,785,251 | |
Exchange-Traded Futures Contracts | ||
Foreign Contracts | 1,161,610 | |
United States [Member] | ||
Short-Term Investments | 30,347,000 | |
Exchange-Traded Futures Contracts | ||
Foreign Contracts | (6,467,200) | |
Fair Value, Inputs, Level 1 [Member] | Foreign Contracts [Member] | ||
Short-Term Investments | 78,785,251 | |
Exchange-Traded Futures Contracts | ||
Foreign Contracts | 1,161,610 | |
Fair Value, Inputs, Level 1 [Member] | United States [Member] | ||
Short-Term Investments | 30,347,000 | |
Exchange-Traded Futures Contracts | ||
Foreign Contracts | (6,467,200) | |
Fair Value, Inputs, Level 2 [Member] | Foreign Contracts [Member] | ||
Short-Term Investments | 0 | |
Exchange-Traded Futures Contracts | ||
Foreign Contracts | 0 | |
Fair Value, Inputs, Level 2 [Member] | United States [Member] | ||
Short-Term Investments | 0 | |
Exchange-Traded Futures Contracts | ||
Foreign Contracts | 0 | |
Fair Value, Inputs, Level 3 [Member] | Foreign Contracts [Member] | ||
Short-Term Investments | 0 | |
Exchange-Traded Futures Contracts | ||
Foreign Contracts | $ 0 | |
Fair Value, Inputs, Level 3 [Member] | United States [Member] | ||
Short-Term Investments | 0 | |
Exchange-Traded Futures Contracts | ||
Foreign Contracts | $ 0 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS - Fair Value of Derivative Instruments (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | ||
Statements of Financial Condition Location | Assets | |
Futures - Commodity Contracts | $ (6,467,200) | $ 1,161,610 |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS - Effect of Derivative Instruments (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Location of Gain (Loss) on Derivatives Recognized in Income | Realized gain (loss) on closed positions | |
Realized Gain (Loss) on Derivatives Recognized in Income | $ 63,479,920 | $ 14,459,540 |
Change in Unrealized Gain (Loss) on Derivatives Recognized in Income | $ (7,628,810) | $ (341,900) |
Commodity Contract [Member] | ||
Location of Gain (Loss) on Derivatives Recognized in Income | Change in unrealized gain (loss) on open positions |