Publications: Notes at the Margin

Oil's Potential "Leasco" Implosion (June 15, 2020)


The computer-leasing firm Leasco is likely unfamiliar to many readers. We bring up the company here because its history provides a lesson for those chasing the oil market, particularly buyers of the United States Oil Fund (USO). USO is the exchange-traded fund (ETF) that gives speculators a way to gamble in oil futures. The Leasco story also offers a warning to the US independent oil producers benefiting from the actions of such speculators. (Buying by USO investors lifts the forward price of WTI, enabling the oil firms to hedge profitably.) The Leasco saga should be a warning as well to those who talk of US energy dominance.


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