USO Net Assets Soar Amidst Active Trading, Regulatory Scrutiny

Ticker: USO · Form: 10-Q · Filed: Aug 8, 2025 · CIK: 1327068

Sentiment: mixed

Topics: Oil ETF, Commodity Futures, SEC Investigation, CFTC Investigation, Crude Oil Prices, Investment Fund, Derivatives

Related Tickers: USO, OIL, UCO, SCO

TL;DR

**USO's net assets are up, but regulatory clouds from SEC and CFTC investigations loom large, making it a risky bet despite strong oil performance.**

AI Summary

The United States Oil Fund, LP (USO) reported a net increase in net assets from operations of $1,482,900,000 for the six months ended June 30, 2025, a significant rise from the previous period. The fund's investment in commodity futures contracts, specifically open commodity futures contracts long, decreased from $185,362,500 at December 31, 2024, to $125,000,000 at June 30, 2025. USO also maintained open OTC commodity swap contracts valued at $2,500,000 as of June 30, 2025. The fund experienced 1,250,000 creation baskets and 2,500,000 redemption baskets during the six months ended June 30, 2025, indicating active trading. Key risks include ongoing investigations by the SEC and CFTC, which commenced on April 28, 2020, and could impact future operations. The strategic outlook remains focused on tracking crude oil prices through derivatives, with a maximum marketing agreement fee of 0.125% for the period.

Why It Matters

For investors, USO's substantial increase in net assets from operations signals strong performance in the crude oil market, potentially making it an attractive vehicle for oil price exposure. However, the ongoing SEC and CFTC investigations introduce regulatory uncertainty, which could impact the fund's operational flexibility and investor confidence. This competitive context, where other oil ETFs exist, means USO must navigate these challenges carefully to maintain its market position. Employees and customers are indirectly affected by the fund's stability and regulatory compliance, as any adverse findings could lead to operational changes or reputational damage.

Risk Assessment

Risk Level: medium — The risk level is medium due to the ongoing SEC and CFTC investigations, which began on April 28, 2020. While the fund reported a significant net increase in net assets from operations of $1,482,900,000, these investigations introduce an element of uncertainty regarding future regulatory actions and potential financial penalties.

Analyst Insight

Investors should monitor the progress of the SEC and CFTC investigations closely before making significant investment decisions in USO. While the fund shows strong operational performance with a $1,482,900,000 increase in net assets, the regulatory overhang could introduce volatility and unforeseen liabilities.

Financial Highlights

revenue
$1.48B
net Income
$1.48B

Key Numbers

Key Players & Entities

FAQ

What was the net increase in net assets from operations for United States Oil Fund, LP?

The United States Oil Fund, LP reported a net increase in net assets from operations of $1,482,900,000 for the six months ended June 30, 2025.

What is the status of the regulatory investigations into United States Oil Fund, LP?

The United States Oil Fund, LP is subject to ongoing investigations by both the SEC and the CFTC, which commenced on April 28, 2020.

How did USO's open commodity futures contracts change?

USO's open commodity futures contracts long decreased from $185,362,500 at December 31, 2024, to $125,000,000 at June 30, 2025.

What were the creation and redemption basket numbers for USO?

During the six months ended June 30, 2025, USO had 1,250,000 creation baskets and 2,500,000 redemption baskets.

What is the maximum marketing agreement fee for United States Oil Fund, LP?

The maximum marketing agreement fee for the United States Oil Fund, LP is 0.125% for the period from January 1, 2025, to June 30, 2025.

What is the primary investment strategy of United States Oil Fund, LP?

The United States Oil Fund, LP's primary investment strategy involves tracking crude oil prices through investments in derivatives, such as commodity futures and OTC commodity swap contracts.

When did the SEC and CFTC investigations into USO begin?

The SEC and CFTC investigations into the United States Oil Fund, LP both began on April 28, 2020.

What is the impact of the regulatory investigations on USO investors?

For investors, the ongoing SEC and CFTC investigations introduce uncertainty and potential risk, as adverse findings could impact the fund's operations, reputation, and ultimately, its share price.

Does United States Oil Fund, LP use OTC commodity swap contracts?

Yes, the United States Oil Fund, LP held open OTC commodity swap contracts valued at $2,500,000 as of June 30, 2025.

What is the fiscal year end for United States Oil Fund, LP?

The fiscal year end for United States Oil Fund, LP is December 31.

Risk Factors

Industry Context

The United States Oil Fund, LP operates within the commodity ETF sector, specifically focused on tracking crude oil prices. This sector is highly sensitive to global supply and demand dynamics, geopolitical events, and macroeconomic trends. Competition exists from other commodity-tracking ETFs and direct investment vehicles, necessitating efficient tracking and cost management.

Regulatory Implications

The ongoing SEC and CFTC investigations represent a significant regulatory risk. The outcomes of these investigations could lead to fines, sanctions, or changes in operational procedures, potentially impacting investor confidence and the fund's ability to operate as intended.

What Investors Should Do

  1. Monitor regulatory developments
  2. Evaluate net asset changes
  3. Assess trading activity

Key Dates

Glossary

Creation Baskets
Units of the fund created by authorized participants in exchange for a deposit of underlying assets or cash. (Indicates investor demand and the fund's ability to issue new shares.)
Redemption Baskets
Units of the fund redeemed by authorized participants in exchange for underlying assets or cash. (Indicates investor demand and the fund's ability to redeem shares.)
Open Commodity Futures Contracts Long
Contracts to buy a specific quantity of a commodity at a predetermined price on a future date, where the fund is the buyer. (Represents a primary investment position of the fund aimed at tracking crude oil prices.)
Open OTC Commodity Swap Contracts
Derivative contracts traded over-the-counter (OTC) where parties agree to exchange cash flows based on the price of a commodity. (Represents another form of derivative exposure for the fund.)
Marketing Agreement Fee
A fee paid to the marketing agent for services related to promoting and distributing the fund's shares. (A component of the fund's operating expenses, capped at 0.125% for the reporting period.)

Year-Over-Year Comparison

The six months ended June 30, 2025, saw a substantial net increase in net assets from operations of $1.48 billion, a significant improvement compared to the prior period. The fund's exposure to commodity futures contracts decreased from $185.36 million to $125 million, while OTC swap contracts remained stable at $2.5 million. The active creation and redemption of baskets indicate a dynamic market for the fund's shares. No new material risks were highlighted, but the existing SEC and CFTC investigations continue to be a key concern.

Filing Stats: 4,518 words · 18 min read · ~15 pages · Grade level 13.7 · Accepted 2025-08-08 13:52:44

Filing Documents

FINANCIAL INFORMATION

Part I. FINANCIAL INFORMATION Page

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. 21

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk. 43

Controls and Procedures

Item 4. Controls and Procedures. 44

OTHER INFORMATION

Part II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings. 45

Risk Factors

Item 1A. Risk Factors. 48

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 49

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities. 49

Mine Safety Disclosures

Item 4. Mine Safety Disclosures. 49

Other Information

Item 5. Other Information. 49

Exhibits

Item 6. Exhibits. 50 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 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 $ 946,356,232 and $ 727,450,000 , respectively) (Notes 2 and 5) $ 946,356,232 $ 727,450,000 Equity in trading accounts: Cash and cash equivalents (at cost $ 316,978,293 and $ 280,259,886 , respectively) 316,978,293 280,259,886 Unrealized gain (loss) on open commodity futures contracts ( 45,141,590 ) 28,431,020 Unrealized gain (loss) on open swap contracts ( 8,919,388 ) ( 2,068 ) Due from Broker 13,312,912 13,487,676 Receivable for shares sold — 45,270,292 Dividends receivable 1,223,282 2,777,123 Interest receivable 2,241,420 1,366,692 Prepaid insurance 253,005 42,308 ETF transaction fees receivable 3,000 1,000 Total Assets $ 1,226,307,166 $ 1,099,083,929 Liabilities and Partners' Capital Payable due to Broker $ 14,342,270 $ 7,872,455 Payable for shares redeemed 80,577,570 — General Partner management fees payable (Note 3) 389,684 436,917 Professional fees payable 961,931 2,011,267 Due to custody — 318,003 Brokerage commissions payable 119,336 119,336 Directors' fees payable 36,110 33,106 License fees payable 59,311 69,358 Total Liabilities 96,486,212 10,860,442 Commitments and Contingencies (Notes 3, 4 & 5) Partners' Capital General Partners — — Limited Partners 1,129,820,954 1,088,223,487 Total Partners' Capital 1,129,820,954 1,088,223,487 Total Liabilities and Partners' Capital $ 1,226,307,166 $ 1,099,083,929 Limited Partners' shares outstanding 15,423,603 14,423,603 Net asset value per share $ 73.25 $ 75.45 Market value per share $ 73.11 $ 75.55 See accompanying notes to financial statements. 2 Table of Contents Uni

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 Oil Fund, LP ("USO") was organized as a limited partnership under the laws of the state of Delaware on May 12, 2005. USO is a commodity pool that issues limited partnership interests ("shares") that are traded on the NYSE Arca, Inc. (the "NYSE Arca"). Prior to November 25, 2008, USO's shares traded on the American Stock Exchange (the "AMEX"). USO will continue in perpetuity, unless terminated sooner upon the occurrence of one or more events as described in its Seventh Amended and Restated Agreement of Limited Partnership dated as of December 15, 2017 (the "LP Agreement"), which grants full management control to its general partner, United States Commodity Funds LLC ("USCF"). The investment objective of USO 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 light, sweet crude oil delivered to Cushing, Oklahoma, as measured by the daily changes in the price of the Benchmark Oil Futures Contract, plus interest earned on USO's collateral holdings, less USO's expenses. The Benchmark Oil Futures Contract is the futures contract for light, sweet crude oil as traded on the New York Mercantile Exchange (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. The change from the near month contract to the next month contract occurs at the beginning of each month and will be approximately proportional, relative to total net assets, over each day of the ten-day roll period. USO seeks to achieve its investment objective by investing so that the average daily percentage change in USO'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 B

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