USO — the United States Oil Fund — has swung back to maximum borrow stress just days after the lending market appeared to be normalising, with short interest climbing further and availability dropping to near zero again.
The brief relief visible in last week's note has reversed sharply. Availability, which had recovered to nearly 19% by May 26, collapsed back to just 1.4% by June 2. That is effectively a return to the fully-lent-out condition that dominated most of May — only one share remains available for every seventy already borrowed. The May 20 peak of zero availability, which had seemed like an extreme, has been nearly matched again in under a week. Borrow costs are running at 14.5% APR, down from last week's 16.6% but still nearly four times the mid-April level. The lending market is back under maximum pressure.
Short interest has not retreated — it has accelerated. The short position climbed 33% over the past week to 139.3% of free float, up from 104.6% cited in the prior note. That is now a 56% increase over the past month. A short position exceeding 100% of float cannot be held purely through stock borrows; the overhang implies significant synthetic exposure via options or swaps. The ORTEX short score has held steady near 73.6, a persistently elevated reading that has barely moved all week — suggesting the aggregate positioning is entrenched rather than in flux. Days to cover on the latest FINRA print is 2.06, a modest number that reflects how actively traded the fund remains despite the crowded short base.
Options positioning adds a further layer to the bearish tilt. The put/call ratio is running at 1.68, modestly above its 20-day average of 1.65 — a z-score of just 0.6, meaning the current reading is not extreme relative to recent history. What is notable, however, is the sustained elevation: the PCR has traded between 1.54 and 1.72 for the past six weeks without a meaningful break lower. That persistent skew toward puts reflects ongoing demand for downside protection on crude oil. The 52-week PCR range spans 0.56 to 2.52, so the current level sits closer to the bearish end of the historical distribution without being at an extreme.
The institutional picture adds texture to the short-side pressure. Goldman Sachs held 43% of reported shares as of March 31, having added over 5.1 million shares in the quarter. Morgan Stanley added nearly 1.95 million shares, bringing its stake to 14%. Brevan Howard and Jane Street each entered fresh positions of 1.4 million and 1.03 million shares respectively. These are primarily trading desks and hedge funds rather than long-only holders — consistent with USO's role as a tactical vehicle rather than a buy-and-hold instrument. The insider data is stale by years and carries no informational value for this note.
USO itself closed at $137.27 on June 2, up 1.3% on the day but down 3.9% over the past month — a decline that tracks crude oil's broader softness. The fund has been the vehicle of choice for expressing a bearish oil view, and the renewed tightening of the borrow market, even after a brief loosening, indicates that demand for short exposure has not abated. The key dynamic to watch is whether the borrow pool expands again — as it briefly did last week — or whether availability stays pinned near zero, raising the cost of maintaining existing positions and potentially forcing synthetic substitution further into the options market.
See the live data behind this article on ORTEX.
Open USO on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
