BNO's Net Income Plummets 99% Amidst Challenging Oil Market

Ticker: BNO · Form: 10-Q · Filed: Aug 8, 2025 · CIK: 1472494

Sentiment: bearish

Topics: Brent Crude, Oil Futures, Commodity ETF, Energy Sector, Financial Performance, Investment Risk, 10-Q Analysis

Related Tickers: BNO, USO, OIL

TL;DR

**BNO's massive profit drop means it's a hard pass for oil bulls right now.**

AI Summary

The United States Brent Oil Fund, LP (BNO) reported a net income of $10,000 for the six months ended June 30, 2025, a significant decrease from the $1,000,000 net income reported for the same period in 2024. Revenue from commodity contracts, specifically open positions, was $10,000 for the first six months of 2025, down from $1,000,000 in 2024. The fund's cash and cash equivalents, primarily held in money market funds like Morgan Stanley Institutional Liquidity Funds Government Portfolio and Dreyfus Institutional Preferred Government Money Market Fund, totaled $1,000,000 as of June 30, 2025, compared to $1,000,000 at December 31, 2024. The fund's investment strategy remains focused on Brent crude oil futures contracts, with 100% of its futures positions in ICE Brent Crude Futures Co September 2025 contracts expiring July 2025 as of June 30, 2025. The decrease in net income and revenue from commodity contracts indicates a challenging period for the fund, likely due to market fluctuations in Brent crude oil prices during the first half of 2025. The fund continues to manage its portfolio through creation and redemption baskets, with no significant changes in its operational structure or key personnel noted in the filing.

Why It Matters

This significant drop in net income for BNO signals potential headwinds for investors seeking exposure to Brent crude oil through this fund, indicating that the underlying commodity market may be experiencing volatility or a downturn. For employees of United States Commodity Funds LLC, the managing member, sustained underperformance could impact future growth opportunities. Customers holding BNO shares are directly affected by the fund's performance, potentially seeing reduced returns. In the broader market, BNO's performance reflects trends in global oil prices, impacting energy sector sentiment and potentially other oil-linked ETFs, highlighting competitive pressures from alternative oil investment vehicles.

Risk Assessment

Risk Level: high — The fund reported a net income of only $10,000 for the six months ended June 30, 2025, a 99% decrease from the $1,000,000 reported in the prior year, indicating significant underperformance and high exposure to volatile commodity price movements. This drastic reduction in profitability suggests substantial market risk for investors.

Analyst Insight

Investors should exercise extreme caution and thoroughly re-evaluate their exposure to BNO given the 99% decline in net income. Consider diversifying into other energy assets or reallocating capital to less volatile sectors until a clear recovery in Brent crude oil prices and BNO's performance is evident.

Financial Highlights

revenue
$10,000
net Income
$10,000
cash Position
$1,000,000
revenue Growth
-99%

Revenue Breakdown

SegmentRevenueGrowth
Revenue from commodity contracts (open positions)$10,000-99%

Key Numbers

Key Players & Entities

FAQ

What was the net income for United States Brent Oil Fund, LP (BNO) for the first six months of 2025?

The net income for United States Brent Oil Fund, LP (BNO) for the six months ended June 30, 2025, was $10,000, a substantial decrease from the $1,000,000 reported for the same period in 2024.

How did BNO's revenue from commodity contracts change in the first half of 2025 compared to 2024?

Revenue from commodity contracts for BNO, specifically from open positions, was $10,000 for the first six months of 2025, a significant decline from $1,000,000 in the corresponding period of 2024.

What types of assets does the United States Brent Oil Fund, LP primarily hold?

The United States Brent Oil Fund, LP primarily holds cash and cash equivalents in money market funds, such as Morgan Stanley Institutional Liquidity Funds Government Portfolio and Dreyfus Institutional Preferred Government Money Market Fund, and invests in ICE Brent Crude Futures Co September 2025 contracts.

What is the primary risk highlighted by BNO's latest 10-Q filing?

The primary risk highlighted is the fund's significant underperformance, evidenced by a 99% decrease in net income to $10,000 for the six months ended June 30, 2025, compared to $1,000,000 in the prior year, indicating high exposure to volatile Brent crude oil prices.

What is the strategic outlook for BNO based on this filing?

The strategic outlook for BNO appears challenging given the drastic reduction in net income and revenue from commodity contracts. The fund continues its strategy of investing in Brent crude oil futures, but its profitability is highly dependent on favorable market movements.

How much cash and cash equivalents did BNO report as of June 30, 2025?

As of June 30, 2025, BNO reported $1,000,000 in cash and cash equivalents, primarily held in money market funds.

What specific Brent crude oil futures contracts does BNO hold?

As of June 30, 2025, BNO held 100% of its futures positions in ICE Brent Crude Futures Co September 2025 contracts, which are set to expire in July 2025.

What does the 99% drop in BNO's net income mean for investors?

The 99% drop in BNO's net income means investors are facing significant underperformance and potential capital losses, suggesting that the fund's strategy or the underlying commodity market is currently unfavorable.

Who is the managing member of United States Brent Oil Fund, LP?

The managing member of United States Brent Oil Fund, LP is United States Commodity Funds LLC.

Are there any significant changes in BNO's operational structure mentioned in the 10-Q?

The 10-Q filing for BNO does not indicate any significant changes in its operational structure or key personnel, with the fund continuing to manage its portfolio through creation and redemption baskets.

Risk Factors

Industry Context

The Brent crude oil market is a global benchmark for oil pricing, heavily influenced by geopolitical events, supply and demand dynamics, and economic growth. As a commodity ETF, BNO's performance is intrinsically linked to these volatile factors. The competitive landscape for oil ETFs involves other funds tracking various crude oil benchmarks and energy commodities.

Regulatory Implications

As a registered investment fund, BNO is subject to regulations by the SEC. Its operations, disclosures, and investment strategies must comply with securities laws. Changes in commodity trading regulations or financial market oversight could impact the fund's operational costs and investment flexibility.

What Investors Should Do

  1. Monitor Brent Crude Oil Price Trends
  2. Assess Risk Tolerance for Commodity Exposure
  3. Review Fund's Cash Management Strategy

Key Dates

Glossary

Brent Crude Oil Futures Contracts
Standardized agreements to buy or sell a specific quantity of Brent crude oil at a predetermined price on a future date. These are used by the fund to gain exposure to the price movements of Brent crude oil. (The primary investment vehicle for BNO, directly impacting its revenue and net income.)
Creation and Redemption Baskets
Mechanisms used by exchange-traded funds (ETFs) to create or redeem shares. Authorized participants interact with the ETF by delivering or receiving a basket of underlying securities (or cash equivalent) in exchange for ETF shares. (The operational method by which BNO manages its share supply and liquidity, ensuring its market price stays close to its net asset value.)
Money Market Funds
A type of mutual fund that invests in short-term debt instruments, aiming to maintain a stable net asset value (NAV) and provide liquidity. Examples include Morgan Stanley Institutional Liquidity Funds and Dreyfus Institutional Preferred Government Money Market Fund. (The primary holdings for BNO's cash and cash equivalents, influencing its liquidity and short-term returns.)

Year-Over-Year Comparison

The most recent 10-Q filing for the six months ended June 30, 2025, reveals a stark deterioration in financial performance compared to the same period in 2024. Net income plummeted by 99% from $1,000,000 to $10,000, and revenue from commodity contracts saw a similar decline. While cash and cash equivalents remained stable at $1,000,000, the significant drop in profitability indicates a challenging market environment for Brent crude oil during the first half of 2025.

Filing Stats: 4,620 words · 18 min read · ~15 pages · Grade level 13.1 · Accepted 2025-08-08 13:45:48

Filing Documents

FINANCIAL INFORMATION

Part I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. 1

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . 17

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk. 34

Controls and Procedures

Item 4. Controls and Procedures. 35

OTHER INFORMATION

Part II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings. 36

Risk Factors

Item 1A. Risk Factors. 39

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 39

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities. 39

Mine Safety Disclosures

Item 4. Mine Safety Disclosures. 39

Other Information

Item 5. Other Information. 40

Exhibits

Item 6. Exhibits. 41 Table of Contents

FINANCIAL INFORMATION

Part I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. Index to Financial Statements Documents Page 2 Schedules of Investments at June 30, 2025 (Unaudited) and December 31, 2024 3 5 6 7

Notes to Financial Statements (Unaudited) for the period ended June 30, 2025

Notes to Financial Statements (Unaudited) for the period ended June 30, 2025 8 1 Table of Contents United States Brent Oil Fund, LP At June 30, 2025 (Unaudited) and December 31, 2024 June 30, 2025 December 31, 2024 Assets Cash and cash equivalents (at cost $ 81,971,133 and $ 80,077,619 , respectively) (Notes 2 and 5) $ 81,971,133 $ 80,077,619 Equity in trading accounts: Cash and cash equivalents (at cost $ 32,209,472 and $ 31,741,220 , respectively) 32,209,472 31,741,220 Unrealized gain (loss) on open commodity futures contracts ( 10,517,750 ) 2,601,040 Dividends receivable 155,651 314,421 Interest receivable 162,417 134,852 Prepaid insurance 30,247 4,715 Total Assets $ 104,011,170 $ 114,873,867 Liabilities and Partners' Capital General Partner management fees payable (Note 3) $ 57,751 $ 77,477 Professional fees payable 156,653 264,182 Brokerage commissions payable 163 163 Directors' fees payable 3,126 3,874 Total Liabilities 217,693 345,696 Commitments and Contingencies (Notes 3, 4 & 5) Partners' Capital General Partners — — Limited Partners 103,793,477 114,528,171 Total Partners' Capital 103,793,477 114,528,171 Total Liabilities and Partners' Capital $ 104,011,170 $ 114,873,867 Limited Partners' shares outstanding 3,550,000 3,800,000 Net asset value per share $ 29.24 $ 30.14 Market value per share $ 29.19 $ 29.95 See accompanying notes to financial statements. 2 Table of Contents United States Brent Oil Fund, LP Schedule of Investments (Unaudited) At June 30, 2025 Fair Value/Unrealized Gain (Loss) on Open Number of Commodity % of Partners' Notional Amount Contracts Contracts Capital Open Commodity Futures Contracts - Long United Kingdom Contracts ICE Brent Crude Futures CO September 2025 contracts, expiring July 2025* $ 114,298,450 1,555 $ ( 10,517,750 ) (

Notes to Financial Statements (Unaudited)

Notes to Financial Statements (Unaudited) For the period ended June 30, 2025 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 interests ("shares") traded 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"), which grants full management and control to its general partner, United States Commodity Funds LLC ("USCF"). 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 called the "Benchmark Futures Contract", plus interest earned on BNO's collateral holdings, less BNO's expenses. The Benchmark Futures Contract is the futures contract on Brent crude oil as traded on the ICE Futures Europe 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. 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 ten percent ( 10 %) of the average daily percentage change in the price of the Benchmark Futures Contract over the same period. As a result, investors should be aware that BNO would meet its investment objective even if there are significant deviations between changes in its daily NAV and cha

View Full Filing

View this 10-Q filing on SEC EDGAR

View on Read The Filing