10-K: United States 12 Month Oil Fund, LP Reports Annual Results for 2024

United States 12 Month Oil Fund, LP releases its 10-K filing, detailing its performance and financial standing as of December 31, 2024.

Summary

• United States 12 Month Oil Fund, LP (USL) is a Delaware limited partnership aiming to mirror the daily percentage changes in the spot price of light, sweet crude oil, using a benchmark of 12 NYMEX futures contracts.
• USL invests primarily in light, sweet crude oil futures contracts and, to a lesser extent, other oil-related investments.
• The fund's goal is to maintain its average daily percentage change in NAV within plus/minus 10% of the average daily percentage change in the price of the Benchmark Oil Futures Contracts over any 30-day period.
• As of December 31, 2024, USL had 1,300,000 shares outstanding and a per share NAV of $38.01, compared to $35.23 at the end of 2023.
• For the 30-valuation days ended December 31, 2024, the average daily change in the Benchmark Oil Futures Contracts was 0.196%, while the average daily change in the per share NAV of USL over the same time period was 0.209%.
• USL's actual total return for 2024 was 7.89%, outperforming its benchmark by 5.56%.

Sentiment

Score: 6

Explanation: The document is factual and reports on the fund's performance. The sentiment is neutral, reflecting the fund's ability to track its benchmark and generate positive returns, but also acknowledging the risks and challenges inherent in the crude oil market.

Positives

• USL's NAV increased from $35.23 at the end of 2023 to $38.01 at the end of 2024.
• USL's actual total return for 2024 was 7.89%, outperforming its benchmark by 5.56%.

Negatives

• The fund is subject to the risks associated with contango and backwardation in the crude oil futures market, which can impact total returns.
• USL's expenses, including management fees and brokerage commissions, can reduce its ability to track its benchmark.

Risks

• Fluctuations in crude oil prices can materially affect an investment in USL's shares.
• USL may provide little or no diversification benefits.
• Daily percentage changes in USL's NAV may not correlate with daily percentage changes in the average of the prices of the Benchmark Oil Futures Contracts.
• Accountability levels, position limits, and daily price fluctuation limits set by exchanges have the potential to cause tracking error.
• An investor's tax liability may exceed the amount of distributions, if any, on its shares.
• USL will be subject to credit risk with respect to counterparties to OTC contracts entered into by USL.
• Valuing OTC derivatives may be less certain than actively traded financial instruments.
• Infectious disease outbreaks like COVID-19 could negatively affect the valuation and performance of USLs investments.

Future Outlook

The report discusses potential impacts from market volatility, regulatory changes, and geopolitical events, but does not provide specific forward-looking guidance.

Industry Context

The report provides context on the crude oil market, including factors affecting supply and demand, and discusses the impact of contango and backwardation on total returns.

Comparison to Industry Standards

• The report does not provide a direct comparison to specific competitors.
• However, it details USL's performance relative to its benchmark, which is a common industry practice for commodity-tracking funds.
• The report mentions other USCF-managed funds (Related Public Funds) and their pro rata expense sharing, indicating a shared services model common in fund management.

Legal Proceedings

• USCF and USO were named as defendants in an action filed by Optimum Strategies Fund I, LP, a purported investor in call option contracts on USO (the Optimum Strategies Action).
• On November 8, 2021, USCF and USO announced a resolution with each of the SEC and the CFTC relating to matters set forth in certain Wells Notices issued by the staffs of each of the SEC and CFTC.
• On June 19, 2020, USCF, USO, John P. Love, and Stuart P. Crumbaugh were named as defendants in a putative class action filed by purported shareholder Robert Lucas (the Lucas Class Action).
• On July 10, 2020, purported shareholder Momo Wang filed a putative class action complaint, individually and on behalf of others similarly situated, against defendants USO, USCF, John P. Love, Stuart P. Crumbaugh, Nicholas D. Gerber, Andrew F Ngim, Robert L. Nguyen, Peter M. Robinson, Gordon L. Ellis, Malcolm R. Fobes, III, ABN Amro, BNP Paribas Securities Corp., Citadel Securities LLC, Citigroup Global Markets Inc., Credit Suisse Securities USA LLC, Deutsche Bank Securities Inc., Goldman Sachs & Company, JP Morgan Securities Inc., Merrill Lynch Professional Clearing Corp., Morgan Stanley & Company Inc., Nomura Securities International Inc., RBC Capital Markets LLC, SG Americas Securities LLC, UBS Securities LLC, and Virtu Financial BD LLC, in the U.S. District Court for the Northern District of California as Civil Action No. 3:20-cv-4596 (the Wang Class Action).
• On August 10, 2020, purported shareholder Darshan Mehan filed a derivative action on behalf of nominal defendant USO, against defendants USCF, John P. Love, Stuart P. Crumbaugh, Nicholas D. Gerber, Andrew F Ngim, Robert L. Nguyen, Peter M. Robinson, Gordon L. Ellis, and Malcolm R. Fobes, III (the Mehan Action).
• On August 27, 2020, purported shareholders Michael Cantrell and AML Pharm. Inc. DBA Golden International filed two separate derivative actions on behalf of nominal defendant USO, against defendants USCF, John P. Love, Stuart P. Crumbaugh, Andrew F Ngim, Gordon L. Ellis, Malcolm R. Fobes, III, Nicholas D. Gerber, Robert L. Nguyen, and Peter M. Robinson in the U.S. District Court for the Southern District of New York at Civil Action No. 1:20-cv-06974 (the Cantrell Action) and Civil Action No. 1:20-cv-06981 (the AML Action), respectively.

Related Party Transactions

• USL pays management fees to USCF, its general partner, at an annualized rate of 0.60% of average daily total net assets.

Stakeholder Impact

• Shareholders are subject to the risks associated with crude oil price volatility and the fund's ability to track its benchmark.
• Authorized Participants are the only entities that can directly create or redeem shares with USL.
• USL's performance impacts the financial results of USCF, its general partner.

Key Dates