10-Q: Gasoline Fund Sees Strong NAV Growth Amidst Volatile Market

United States Gasoline Fund, LP reports a substantial increase in Net Asset Value (NAV) per share, driven by strong performance in gasoline futures contracts during the first half of 2026.

Summary

• The United States Gasoline Fund, LP (UGA) reported a significant increase in its Net Asset Value (NAV) per share, rising from $61.77 at the end of 2025 to $102.56 by June 30, 2026.
• This growth represents a 66.04% increase in NAV over the six-month period, largely attributed to favorable movements in gasoline futures contracts.
• The fund's investment objective is to track the daily percentage changes of the spot price of gasoline, as measured by the near-month NYMEX RBOB gasoline futures contract.
• During the six months ended June 30, 2026, the Benchmark Futures Contract price increased by approximately 68.80%, with UGA's NAV tracking this movement closely.
• The fund's total assets grew from $77,459,738 at the end of 2025 to $107,886,210 by June 30, 2026.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing positively due to the significant increase in Net Asset Value (NAV) and the strong performance of the fund's benchmark, indicating effective tracking and a favorable market environment for gasoline futures.

Positives

• Significant increase in Net Asset Value (NAV) per share from $61.77 to $102.56, a 66.04% gain over six months.
• Strong performance of the Benchmark Futures Contract, which increased by approximately 68.80% during the same period, indicating effective tracking.
• Total assets increased substantially from $77.5 million to $107.9 million.
• The fund's NAV performance (66.04%) outperformed the estimated benchmark return (64.03%) by 2.01% for the six-month period.
• Positive net income of $55,942,791 for the six months ended June 30, 2026, compared to a net loss of $3,640,293 in the prior year period.

Negatives

• The fund experienced a net loss of $2,295,490 in the three months ended June 30, 2026, compared to a loss of $5,705,601 in the prior year period.
• Total expenses increased from $174,492 in Q2 2025 to $308,014 in Q2 2026.
• Average interest rates earned on short-term investments were lower in the first half of 2026 compared to 2025, impacting income yield.
• Redemption of partnership shares amounted to $80,562,475 in the first six months of 2026, a significant outflow.

Risks

• Market volatility in gasoline futures prices can lead to significant fluctuations in the fund's NAV.
• The fund is exposed to commodity price risk, particularly gasoline price risk, through its holdings of futures contracts.
• Potential for tracking error between the fund's NAV and the Benchmark Futures Contract due to expenses, execution prices, and use of other gasoline-related investments.
• Geopolitical conflicts, natural disasters, and public health disruptions can impact commodity prices and investment liquidity.
• Interest rate risk may affect the value of fixed-income securities held by the fund.
• Credit risk exists if counterparties to derivative contracts fail to meet their obligations.
• The fund may lose money by investing in government money market funds, as these are not insured or guaranteed by the FDIC.
• The fund's ability to meet its investment objective could be inhibited by exchange accountability levels and position limits.

Future Outlook

The fund aims to continue tracking the daily percentage changes of the spot price of gasoline, as measured by the Benchmark Futures Contract. Management believes that market arbitrage opportunities will cause daily changes in the share price to closely track daily changes in NAV. The fund anticipates that interest rates may continue to stagnate, and if interest earned is higher than fees and expenses, the fund could outperform its benchmark.

Management Comments

• USCF believes that market arbitrage opportunities will cause daily changes in UGA's share price on the NYSE Arca on a percentage basis to closely track daily changes in UGA's per share NAV on a percentage basis.
• USCF believes that daily changes in prices of the Benchmark Futures Contract have historically closely tracked the daily changes in spot prices of gasoline.
• USCF believes that gasoline has historically not demonstrated a strong correlation with equities or bonds over long periods of time.
• USCF anticipates that interest rates may continue to stagnate over the near future.
• USCF anticipates that fees and expenses paid by UGA may be lower than interest earned by UGA. As such, USCF anticipates that UGA could possibly outperform its benchmark so long as interest earned is higher than the fees and expenses paid by UGA.

Industry Context

StockSavvy.ai notes that the gasoline market experienced significant price volatility during the first half of 2026, influenced by geopolitical events such as the Iran war and disruptions in key maritime chokepoints. This volatility, coupled with supply-demand dynamics and strategic reserve releases, created a complex environment for energy commodities. The fund's performance reflects its strategy of tracking gasoline futures amidst these market conditions.

Comparison to Industry Standards

• The United States Gasoline Fund, LP (UGA) aims to track the daily percentage changes of the spot price of gasoline, as measured by the near-month NYMEX RBOB gasoline futures contract, within a 10% band over 30-day periods.
• For the 30-valuation days ended June 30, 2026, the average daily change in the Benchmark Futures Contract was (0.575)%, while UGA's NAV change was (0.566)%, indicating performance within the target tracking goal.
• Since inception (February 26, 2008) to June 30, 2026, the average daily change in the Benchmark Futures Contract was 0.043%, and UGA's NAV change was 0.045%, also within the tracking goal.
• For the six months ended June 30, 2026, UGA's actual total return was 66.04%, outperforming an estimated benchmark return of 64.03% by 2.01%.
• For the six months ended June 30, 2025, UGA's actual total return was (4.23)%, outperforming an estimated benchmark return of (5.70)% by 1.48%.
• The correlation matrix shows that over 10 years, gasoline has a moderate positive correlation (0.300) with Large Cap US Equities (S&P 500) and a stronger positive correlation (0.782) with Crude Oil.
• Over the last year, the correlation between gasoline and Crude Oil remained strong at 0.925, while its correlation with Large Cap US Equities became negative (-0.414).

Legal Proceedings

• Optimum Strategies Action: Claims under Securities Exchange Act of 1934 dismissed with prejudice.
• Settlement of SEC and CFTC Investigations: USCF and USO paid $2.5 million in aggregate civil monetary penalties.
• In re: United States Oil Fund, LP Securities Litigation: Consolidated class action, defendants are contesting claims and have moved for dismissal.
• Mehan Action: Derivative action stayed pending disposition of motions in the related Oil Fund litigation.
• In re United States Oil Fund, LP Derivative Litigation: Derivative actions stayed pending final disposition of motions in the related Oil Fund litigation.

Related Party Transactions

• USCF Management Fee: UGA pays USCF a fee of 0.60% per annum of average daily total net assets.
• USCF pays marketing agent fees and BNY Mellon's fees for custodial, administrative, and transfer agency services.
• UGA pays licensing fees to NYMEX (0.015% on net assets for certain funds).
• UGA pays for its portion of directors and officers liability insurance and fees for independent directors.

Stakeholder Impact

• Shareholders experienced a significant increase in NAV per share, reflecting positive fund performance.
• Investors in the secondary market may see share prices fluctuate based on market prices, which may differ from NAV.
• The fund's strategy of reinvesting interest and dividend income within the portfolio impacts NAV growth.
• Potential for tracking error could affect investors' ability to use UGA for hedging or direct investment strategies.

Next Steps

• Continue to manage the portfolio to ensure daily percentage changes in NAV closely track daily percentage changes in the Benchmark Futures Contract.
• Monitor market conditions, regulatory requirements, and risk mitigation measures.
• Potentially invest in Other Gasoline-Related Investments if market conditions or regulatory requirements necessitate, which may increase transaction expenses and tracking error.
• Continue to publish monthly account statements including Statement of Income (Loss) and Statement of Changes in Net Asset Value.

Key Dates

Recommendation

The fund has demonstrated strong performance and effective tracking of its benchmark, leading to significant NAV growth. However, the inherent volatility of gasoline futures, coupled with ongoing geopolitical risks and the potential for tracking error, warrants a cautious approach. While the recent performance is positive, the speculative nature of commodity futures and the fund's objective make it more suitable for holding rather than aggressive buying or selling without further market analysis.

Keywords

gasoline futures, commodity pool, NYMEX RBOB, energy commodity, futures contracts, net asset value, investment objective, market risk