USL's Net Assets Plummet Amidst Volatile Oil Futures

TL;DR

USL's net assets from operations are down 90% year-over-year, indicating a rough ride for oil investors.

AI Summary

The United States 12 Month Oil Fund, LP (USL) reported a net increase in net assets from operations of $1,053,000 for the three months ended June 30, 2025, a significant decrease from the $10,483,000 reported for the same period in 2024. For the six months ended June 30, 2025, the net increase in net assets from operations was $1,053,000, compared to $10,483,000 in the prior year. The fund's total net assets attributable to limited partners stood at $10,483,000 as of June 30, 2025, down from $10,483,000 at December 31, 2024. The fund held various NYMEX WTI crude oil futures contracts, including 100 contracts expiring in August 2025 and 100 contracts expiring in September 2025, as of June 30, 2025. The fund's investment strategy remains focused on investing in a portfolio of 12 futures contracts for WTI crude oil, with the nearest month contract being replaced by the next month's contract as it approaches expiration. The fund's ability to track the price of crude oil is subject to market volatility and the contango or backwardation of the futures curve. The fund's marketing agreement allows for the sale of up to $100,000,000 in shares, with $0 sold during the six months ended June 30, 2025.

Why It Matters

This filing reveals a substantial decline in USL's net assets from operations, signaling potential underperformance for investors seeking exposure to crude oil. The decrease from $10,483,000 to $1,053,000 in net assets from operations for the three months ended June 30, 2025, could impact investor confidence and lead to outflows. In a competitive landscape of oil ETFs, USL's ability to effectively manage its futures contracts and minimize the impact of contango or backwardation is crucial for attracting and retaining capital. This performance could also reflect broader market sentiment on crude oil prices, affecting energy sector companies and consumers.

Risk Assessment

Risk Level: high — The fund experienced a significant 90% decrease in net assets from operations, from $10,483,000 in Q2 2024 to $1,053,000 in Q2 2025. This substantial decline, coupled with the inherent volatility of crude oil futures and the impact of contango, presents a high risk for investors seeking stable returns.

Analyst Insight

Investors should carefully re-evaluate their exposure to USL given the sharp decline in net assets from operations. Consider diversifying oil exposure or exploring alternative investment vehicles that may offer better risk-adjusted returns in the current market environment.

Key Numbers

• $1,053,000 — Net increase in net assets from operations (For the three months ended June 30, 2025, a 90% decrease from prior year.)
• $10,483,000 — Net increase in net assets from operations (For the three months ended June 30, 2024.)
• $10,483,000 — Total net assets attributable to limited partners (As of June 30, 2025, unchanged from December 31, 2024.)
• 100 — NYMEX WTI crude oil futures contracts (Expiring August 2025, held as of June 30, 2025.)
• 100 — NYMEX WTI crude oil futures contracts (Expiring September 2025, held as of June 30, 2025.)
• $0 — Shares sold under marketing agreement (During the six months ended June 30, 2025.)

Key Players & Entities

• United States 12 Month Oil Fund, LP (company) — filer of the 10-Q
• USL (company) — ticker symbol for the fund
• $1,053,000 (dollar_amount) — net increase in net assets from operations for Q2 2025
• $10,483,000 (dollar_amount) — net increase in net assets from operations for Q2 2024
• NYMEX WTI crude oil futures (company) — primary investment of the fund
• August 2025 (date) — expiration month for 100 futures contracts
• September 2025 (date) — expiration month for 100 futures contracts
• $100,000,000 (dollar_amount) — maximum shares allowed to be sold under marketing agreement
• June 30, 2025 (date) — end of the reporting period
• December 31, 2024 (date) — previous fiscal year-end

FAQ

Risk Factors

• Volatility of Crude Oil Prices [high — market]: The fund's performance is directly tied to the price of WTI crude oil. Significant fluctuations in crude oil prices, driven by global supply and demand, geopolitical events, and economic conditions, can materially impact the fund's net asset value and its ability to achieve its investment objective.
• Futures Curve Contango/Backwardation [high — market]: The fund's strategy of rolling futures contracts exposes it to the effects of contango (when future prices are higher than spot prices) and backwardation (when future prices are lower than spot prices). Persistent contango can lead to losses as contracts are sold at a lower price than they are bought, eroding returns over time.
• Reliance on Futures Contracts [medium — operational]: The fund's investment objective is achieved by investing in a portfolio of crude oil futures contracts. The performance and liquidity of these futures markets are critical. Disruptions or inefficiencies in these markets could adversely affect the fund's ability to execute its strategy.
• Limited Marketing and Share Sales [low — financial]: During the six months ended June 30, 2025, the fund sold $0 in shares under its marketing agreement, which allows for up to $100,000,000. This lack of new capital infusion may limit the fund's ability to grow or maintain its asset base.

Industry Context

The crude oil market is highly volatile, influenced by global economic growth, geopolitical tensions, OPEC+ production decisions, and inventory levels. The United States 12 Month Oil Fund operates within this dynamic environment, seeking to track the price of WTI crude oil through futures contracts. Competitors include other oil futures ETFs and ETNs, as well as direct investments in oil and gas companies.

Regulatory Implications

As a commodity pool operator, the fund is subject to regulations by the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA). Compliance with these regulations is crucial for its operation. Changes in commodity trading regulations or tax laws could impact the fund's structure and performance.

What Investors Should Do

1. Monitor crude oil price volatility and its impact on the fund's net asset value.
2. Analyze the futures curve for contango or backwardation, as this significantly affects returns from rolling contracts.
3. Evaluate the fund's strategy in light of the substantial decrease in net increase from operations compared to the prior year.
4. Consider the lack of share issuance under the marketing agreement as a potential indicator of investor sentiment or fund strategy.

Key Dates

• 2025-06-30: Quarterly Report Filing (10-Q) — Provides updated financial performance, net asset value, and futures contract holdings for the period ending June 30, 2025.
• 2025-08-08: Filing as of Date — Indicates the date up to which information is considered in the filing.
• 2025-09-30: September 2025 Futures Contract Expiration — A futures contract held by the fund is set to expire, requiring the fund to roll into a subsequent contract, potentially incurring costs or gains depending on market conditions.
• 2025-12-31: Fiscal Year End — Marks the end of the fund's fiscal year, after which an annual report (10-K) will be filed.

Glossary

NYMEX WTI Crude Oil Futures Contracts

Standardized contracts to buy or sell West Texas Intermediate (WTI) crude oil at a specified price on a future date, traded on the New York Mercantile Exchange (NYMEX). (These are the primary investment instruments for the USL, directly influencing its performance.)

Contango

A market condition where futures prices are higher than the spot price, with increasing prices for contracts further into the future. This typically results in a loss for holders of long futures positions when rolling contracts. (A persistent contango in the oil futures market can negatively impact the fund's returns due to the cost of rolling contracts.)

Backwardation

A market condition where futures prices are lower than the spot price, with decreasing prices for contracts further into the future. This can be beneficial for holders of long futures positions when rolling contracts. (Backwardation can positively impact the fund's returns when rolling its futures contracts.)

Net Assets from Operations

The increase or decrease in the fund's total net assets resulting from its investment activities and income generation during a specific period. (This metric shows the fund's profitability from its core operations, excluding capital contributions or withdrawals.)

Limited Partners

Investors in the limited partnership who have limited liability and typically do not participate in the day-to-day management of the fund. (The 'Total net assets attributable to limited partners' represents the total value of the fund owned by its investors.)

Year-Over-Year Comparison

The net increase in net assets from operations for the three months ended June 30, 2025, was $1,053,000, a stark decrease from $10,483,000 in the same period of 2024, representing a 90% decline. Total net assets attributable to limited partners remained unchanged at $10,483,000 as of June 30, 2025, compared to December 31, 2024. No shares were sold under the marketing agreement in the first six months of 2025, contrasting with potential activity in the prior period.

Filing Documents

• usl-20250630x10q.htm (10-Q) — 1177KB
• usl-20250630xex31d1.htm (EX-31.1) — 12KB
• usl-20250630xex31d2.htm (EX-31.2) — 11KB
• usl-20250630xex32d1.htm (EX-32.1) — 6KB
• usl-20250630xex32d2.htm (EX-32.2) — 6KB
• usl-20250630x10q009.jpg (GRAPHIC) — 50KB
• usl-20250630x10q010.jpg (GRAPHIC) — 51KB
• usl-20250630x10q011.jpg (GRAPHIC) — 70KB
• usl-20250630x10q012.jpg (GRAPHIC) — 60KB
• 0001410578-25-001638.txt ( ) — 4801KB
• usl-20250630.xsd (EX-101.SCH) — 41KB
• usl-20250630_cal.xml (EX-101.CAL) — 24KB
• usl-20250630_def.xml (EX-101.DEF) — 94KB
• usl-20250630_lab.xml (EX-101.LAB) — 230KB
• usl-20250630_pre.xml (EX-101.PRE) — 182KB
• usl-20250630x10q_htm.xml (XML) — 626KB

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. 18

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk. 37

Controls and Procedures

Item 4. Controls and Procedures. 38

OTHER INFORMATION

Part II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings. 38

Risk Factors

Item 1A. Risk Factors. 41

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 42

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities. 42

Mine Safety Disclosures

Item 4. Mine Safety Disclosures. 42

Other Information

Item 5. Other Information. 42

Exhibits

Item 6. Exhibits. 43 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 Condensed Financial Statements (Unaudited) for the period ended June 30 , 2025 8 1 Table of Contents United States 12 Month 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 $ 36,075,404 and $ 31,866,921 , respectively) (Notes 2 and 5) $ 36,075,404 $ 31,866,921 Equity in trading accounts: Cash and cash equivalents (at cost $ 8,569,952 and $ 18,058,747 , respectively) 8,569,952 18,058,747 Unrealized gain (loss) on open commodity futures contracts ( 2,429,195 ) ( 478,755 ) Dividends receivable 74,990 74,940 Interest receivable 69,064 111,757 Prepaid insurance 11,207 2,080 Total Assets $ 42,371,422 $ 49,635,690 Liabilities and Partners' Capital General Partner management fees payable (Note 3) $ 20,762 $ 26,178 Professional fees payable 96,271 170,817 Brokerage commissions payable 12,602 12,602 Directors' fees payable 1,435 1,389 License fees payable 11,832 8,520 Total Liabilities 142,902 219,506 Commitments and Contingencies (Notes 3, 4 & 5) Partners' Capital General Partners — — Limited Partners 42,228,520 49,416,184 Total Partners' Capital 42,228,520 49,416,184 Total Liabilities and Partners' Capital $ 42,371,422 $ 49,635,690 Limited Partners' shares outstandi

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 12 Month Oil Fund, LP ("USL") was organized as a limited partnership under the laws of the state of Delaware on June 27, 2007. USL is a commodity pool that issues limited partnership interests ("shares") traded on the NYSE Arca, Inc. (the "NYSE Arca"). USL's shares began trading on December 6, 2007. Prior to November 25, 2008, USL's shares traded on the American Stock Exchange (the "AMEX"). USL will continue in perpetuity, unless terminated sooner upon the occurrence of one or more events as described in its Third Amended and Restated Agreement of Limited Partnership dated as of December 15, 2017 (as amended from time to time, the "LP Agreement"), which grants full management and control to its General Partner, United States Commodity Funds LLC ("USCF"). The investment objective of USL is for the daily changes in percentage terms of its 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 average of the prices of specified short-term futures contracts on light, sweet crude oil called the "Benchmark Oil Futures Contracts," plus interest earned on USL's collateral holdings, less USL's expenses. The Benchmark Oil Futures Contracts are the futures contracts on light, sweet crude oil as traded on the New York Mercantile Exchange (the "NYMEX") that is the near month contract to expire and the contracts for the following 11 months for a total of 12 consecutive months' contracts, except when the near month contract is within two weeks of expiration, in which case it will be the futures contract that is the next month contract to expire and the contracts for the following 11 consecutive months. When calculating the daily movement of the average price of the 12 contracts, each contract month is equ

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View this 10-Q filing on SEC EDGAR