10-Q: United States Brent Oil Fund Q1 2026 Financial Results

United States Brent Oil Fund, LP reports a net income of $166.4 million for the first quarter of 2026, driven by a significant increase in Brent crude oil prices.

Summary

• Net income for the three months ended March 31, 2026, was $166.4 million, compared to $4.9 million in the same period of 2025.
• Net asset value (NAV) per share increased from $28.29 at the end of 2025 to $51.86 as of March 31, 2026.
• Total assets grew to $952.1 million from $100.7 million at year-end 2025.
• The fund held 9,154 Brent crude oil futures contracts as of March 31, 2026.
• The Brent crude oil futures market was primarily in a state of backwardation during the quarter.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong performance report, reflecting significant asset growth and positive returns driven by favorable market conditions in the Brent crude oil sector.

Positives

• Significant increase in net income to $166.4 million for Q1 2026.
• Total return for the quarter was 83.32%.
• NAV per share rose approximately 83.32% during the period.
• The fund successfully tracked its benchmark within the established plus/minus 10% range.

Negatives

• Brokerage commissions increased due to a higher number of futures contracts held and traded.
• Management fees increased to $495,478 from $183,818 in the prior year period due to higher net assets.
• The fund remains subject to market volatility and potential tracking errors.

Risks

• Market volatility related to geopolitical conflicts, including the Russia-Ukraine war and Middle East tensions.
• Potential for contango in the futures market, which can negatively impact total returns.
• Credit risk associated with counterparties and clearinghouses.
• Interest rate risk affecting the value of Treasury holdings.
• Regulatory changes impacting commodity interest trading.

Future Outlook

USCF anticipates that interest rates may continue to stagnate and that fees and expenses may be lower than interest earned, potentially allowing the fund to outperform its benchmark. The fund will continue to monitor geopolitical tensions and market conditions that could impact oil prices.

Management Comments

• USCF believes that market arbitrage opportunities will cause daily changes in BNO's share price to closely track daily changes in BNO's per share NAV.
• USCF anticipates that BNO could possibly outperform its benchmark so long as interest earned is greater than the fees and expenses paid by BNO.

Industry Context

StockSavvy.ai notes that the fund's performance is highly sensitive to the term structure of Brent crude oil futures. The shift to backwardation during the quarter provided a tailwind for the fund's strategy compared to periods of contango, which is a common trend observed in commodity-linked ETFs during periods of supply tightness.

Comparison to Industry Standards

• The fund's performance is compared against the Benchmark Futures Contract on the ICE Futures Europe exchange.
• The fund's tracking error is managed within a 10% range of the benchmark, consistent with industry standards for commodity pools.

Legal Proceedings

• In re: United States Oil Fund, LP Securities Litigation (pending).
• Mehan Action (stayed).
• In re United States Oil Fund, LP Derivative Litigation (stayed).

Related Party Transactions

• Management fees paid to USCF.
• Licensing and administrative service agreements with BNY Mellon and other affiliates.

Stakeholder Impact

• Shareholders benefited from an 83.32% total return during the quarter.
• Authorized Participants continue to facilitate the creation and redemption of shares.

Next Steps

• Continue daily management of the portfolio to track the Benchmark Futures Contract.
• Monitor market conditions and regulatory requirements for potential adjustments to investment strategy.
• Continue monthly publication of account statements.

Key Dates

Recommendation

While the fund has delivered strong returns, it is a commodity-linked instrument subject to high volatility and the inherent risks of the oil market. Investors should hold based on their specific exposure needs to Brent crude oil, as the fund is not intended for long-term capital appreciation outside of tracking oil price movements.

Keywords

Brent crude oil, BNO, commodity pool, futures contracts, USCF, energy investing, backwardation, contango