USO - United States Oil Fund (2024)

The United States Oil Fund^® LP (USO) is an exchange-traded security whose shares may be purchased and sold on the NYSE Arca. USO’s investment objective is for the daily changes, in percentage terms, of its shares’ net asset value (NAV) to reflect the daily changes, in percentage terms, of the spot price of light sweet crude oil delivered to Cushing, Oklahoma, as measured by the daily changes in the Benchmark Oil Futures Contract. Specifically, USO seeks for the average daily percentage change in USO’s net asset value, for any period of 30 successive valuation days, to be within plus/minus 10% of the average daily percentage change in the price of the Benchmark Oil Futures Contract over the same period. As a result, investors should be aware that USO would meet its investment objective even if there are significant deviations between changes in its daily NAV and changes in the daily price of the Benchmark Oil Futures Contract provided that the average daily percentage change in USO's NAV over 30 successive valuation days is within plus/minus 10% of the average daily percentage change in the price of the Benchmark Oil Futures Contract over the same period.

AN INVESTMENT IN USO SHOULD NOT BE VIEWED AS AN INVESTMENT IN THE BENCHMARK OIL FUTURES CONTRACT OR LIGHT SWEET CRUDE OIL.

WHILE INVESTING IN USO INVOLVES RISKS SIMILAR TO THOSE INVOLVED WITH AN INVESTMENT DIRECTLY IN THE OIL MARKET, USO IS NOT A PROXY FOR TRADING DIRECTLY IN THE OIL MARKETS AND THESE RISKS ARE REAL.

The Benchmark Oil Futures Contract is the West Texas Intermediate (WTI) crude oil futures contract for light, sweet crude oil delivered to Cushing, Oklahoma that is traded on the NYMEX that is the near month contract to expire and changes, over a ten-day period, into the NYMEX futures contract that is the next month to expire.

USO invests primarily in listed crude oil futures contracts and other oil-related contracts, and may invest in forwards and swap contracts. These investments will be collateralized by cash, cash equivalents, and US government obligations with remaining maturities of 2 years or less.

Prior to the Spring of 2020, USO achieved its investment objective by primarily investing in the Benchmark Futures Contract and oil futures contracts for light, sweet crude oil traded on NYMEX and ICE Futures with the same maturity month as the Benchmark Futures Contract. Until recently, there has only been a limited need for USO to invest in crude oil futures contracts other than the Benchmark Oil Futures Contract. Market conditions, evolving regulatory requirements and risk mitigation measures implemented by certain of USO’s service providers, have made it necessary for USO to exercise greater discretion in investing than it has in the past. Specifically, during April 2020, the factors requiring USO to exercise greater discretion included, without limitation:

• NYMEX and ICE Futures imposed accountability levels and position limits on USO’s investments in the Benchmark Oil Futures Contract and the ICE WTI Contract.
• USO’s futures broker constrained USO’s ability to invest in the Benchmark Oil Futures Contract.
• A large number of USO shares were purchased in a relatively short period of time.

These events severely limited USO’s ability to have a substantial portion of its assets invested in the Benchmark Oil Futures Contract. Accordingly, on April 17, 2020, USO commenced investing, and has continued to invest, in oil futures contracts other than the Benchmark Oil Futures Contract, consistent with its authority to do so pursuant to its prospectus. Although conditions in the crude oil market have improved, and USO has added new futures brokerage relationships that afford it additional trading capacity, USO is continuing in to invest in oil futures contracts other than the Benchmark Oil Futures Contract.

Beginning with the monthly roll in September 2023 and ending with the monthly roll in January 2024, USO's intention is to begin transitioning its investment portfolio so that it will primarily invest in Benchmark Oil Futures Contracts, consistent with USO's investment strategy prior to the Spring of 2020. However, USO has had, and will continue to have, the ability to invest in Oil Futures Contracts beyond the Benchmark Oil Futures Contract and Other Oil-Related Investments, such as OTC swaps, and USO may make such investments if market conditions, regulatory requirements, risk mitigation measures (including those that may be taken by USO, USO's FCMs, counterparties or other market participants), liquidity requirements, or other factors require USO to do so in order to meet its investment objective. USO may invest in Oil Futures Contracts beyond the Benchmark Oil Futures Contract, and/or Other Oil-Related Investments, as a result or in response to any of the foregoing factors. In addition, USO may need to hold significant portions of its portfolio in cash beyond what it has historically held for reasons including (but not limited to) the need to address the changes in market conditions, regulatory requirements or risk mitigation measures or the need to satisfy potential margin requirements.

Investments in oil futures contracts other than the Benchmark Oil Futures Contract has impacted and could continue to impact the performance of USO and may make it difficult for USO to closely track the Benchmark Oil Futures Contract or meet its investment objective of having the change in its NAV for any period of 30 successive valuation days be within plus/minus ten percent (10%) of the average daily percentage change in the price of the Benchmark Oil Futures Contract over the same period. As a result, investors should be aware that USO would meet its investment objective even if there are significant deviations between changes in its daily NAV and changes in the daily price of the Benchmark Oil Futures Contract provided that the average daily percentage change in USO's NAV over 30 successive valuation days is within plus/minus 10% of the average daily percentage change in the price of the Benchmark Oil Futures Contract over the same period. The differences in changes in the price of the Benchmark Oil Futures Contract and USO’s per share NAV could, in the future, and has, in the past on a daily basis, exceeded plus/minus 10%. As an example, recently, in April 2020, changes in the NAV of USO deviated from changes in the price of the Benchmark Oil Futures Contract by -16.527%. If such deviation had continued over a period of 30 successive valuation days, USO would not have met its stated investment objective. However, notwithstanding that there may have been deviations greater than plus/minus 10% on certain days in the month of April, as demonstrated by the chart below, titled Rolling 30-day average difference between USO’s NAV and the Benchmark Oil Futures Contract, this trend did not continue on a rolling 30-day basis and, as a result USO met, and continues to meet, its investment objective. See USO’s current prospectus, on the website, for greater detail about the impact of recent events on USO’s performance in April 2020.

The parameters for USO’s investment discretion are set forth and discussed in detail in USO’s prospectus. USO can change such parameters if regulatory requirements, market conditions, risk mitigation measures, liquidity requirements or other factors make it necessary for USO to do so. USO’s portfolio holdings, as well as its investment intentions with respect to the type and percentage of investments in USO’s portfolio, are disclosed daily on the portfolio holdings page of the website.

Reasons to Consider USO

• USO provides features including, intra-day pricing, and market, limit, and stop orders.
• USO provides portfolio holdings, market price, NAV and TNA on its website each day. It also provides USO’s target portfolio anticipated by the end of the roll or any rebalance, based on market conditions and regulatory requirements on the website each day.

^ On April 28, 2020, there was a 1-for-8 reverse share split. Historical shares outstanding, net asset value per share has been adjusted to reflect the 1-for-8 reverse share split on a retroactive basis.

The performance data quoted above represents past performance. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and value of the Fund shares will fluctuate so that an investor's shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted.

This historical NAV chart reflects an 8-for-1 reverse share split that was effected on April 28, 2020.

Rolling 30-Day Average Difference between USO’s NAV and the Benchmark Oil Futures Contract

USO’s investment objective is for the daily changes, in percentage terms, of its shares’NAV to reflect the daily changes, in percentage terms, of the spot price of light sweetcrude oil delivered to Cushing, Oklahoma, as measured by the daily changes in theBenchmark Futures Contract. Specifically, USO seeks for the average daily percentagechange in USO’s net asset value, for any period of 30 successive valuation days, to bewithin plus/minus 10% of the average daily percentage change in the price of theBenchmark Oil Futures Contract over the same period. As a result, investors should be aware that USO would meet its investment objective even if there are significant deviations between changes in its daily NAV and changes in the daily price of the Benchmark Oil Futures Contract provided that the average daily percentage change in the USO's NAV over 30 successive valuation days is within plus/minus 10% of the average daily percentage change in the price of the Benchmark Oil Futures Contract over the same period.

The following chart shows, for the period between October 1, 2023 - December 31, 2023, the rolling 30-day average difference between USO’s net asset value and theBenchmark Oil Futures Contract. This is measured by subtracting the return of theBenchmark Oil Futures Contract from the return on USO’s net asset value for each ofthe last thirty business days, and then averaging those thirty differences. Thecalculation is repeated daily.

The performance data quoted above represents past performance. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and value of the Fund shares will fluctuate so that an investor's shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted.

Performance

The performance data quoted above represents past performance. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and value of the Fund shares will fluctuate so that an investor's shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted.

The Fund's NAV is calculated by dividing the value of the Fund's total assets less total liabilities by the number of shares outstanding. Share price returns are based on closing prices for the Fund and do not represent the returns an investor would receive if shares were traded at other times.

^† USO commenced operations on 04/10/2006

Growth of $10,000 Investment

This chart shows how a hypothetical investment of $10,000 in the Fund at its inception would have performed versus an investment in the Fund’s benchmark futures contract(s). The values indicate what $10,000 would have grown to over the time period indicated. The hypothetical example does not represent the returns of any particular investment.

The performance data quoted above represents past performance. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and value of the Fund shares will fluctuate so that an investor's shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted.

Average Daily Returns

The performance data quoted above represents past performance. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investment return and value of the Fund shares will fluctuate so that an investor's shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted.

Premium / Discount

The performance data quoted above represents past performance. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. Investment return and value of the Fund shares will fluctuate so that an investor's shares, when sold, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted.

The above frequency distribution chart presents information about the difference between the daily market price for shares of the Fund and the Fund's reported NAV. The amount that the Fund's market price is above the reported NAV is called the premium. The amount that the Fund's market price is below the reported NAV is called the discount. The market price is determined using the midpoint between the highest bid and the lowest offer on the listing exchange, as of the time that the Fund's NAV is calculated (usually 4:00 pm Eastern time). The vertical axis of the chart shows the premium or discount expressed in basis points. The horizontal axis indicates the number of trading days in the period covered by the chart. Each bar in the chart shows the number of trading days in which the Fund traded within the premium/discount range indicated.

^* A basis point is equal to 1/100th of 1%.

The amount of the discount or premium in the trading price of USO relative to USO’s NAV per share may be influenced by various factors including, among other things, the number of investors who seek to purchase or sell shares in the secondary market and the liquidity of the oil futures. As an example, in April 21, 2020, the price per USO share sold in the secondary market was 36% higher than the end of day per share NAV of USO. This discrepancy was attributable to increased demand for USO shares due to market forces and USO’s having temporarily halted the sale of Creation Baskets.