10-K: United States Gasoline Fund, LP Reports Annual Results for 2024

United States Gasoline Fund, LP files its annual report on Form 10-K, detailing its performance and financial condition for the year ended December 31, 2024.

Summary

• United States Gasoline Fund, LP (UGA) is a commodity pool that issues shares traded on the NYSE Arca.
• The investment objective of UGA is to reflect the daily changes in percentage terms of the spot price of gasoline, as measured by the daily changes in the price of a specified short-term futures contract on gasoline called the Benchmark Futures Contract.
• UGA seeks to achieve its investment objective by investing so that the average daily percentage change in UGAs 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 Benchmark Futures Contract over the same period.
• As of December 31, 2024, UGA had 1,600,000 shares outstanding.
• For the year ended December 31, 2024, UGAs per share NAV increased by approximately 3.79%, ending the year at $62.94.
• The Benchmark Futures Contract prices decreased approximately (4.61)% over the year.
• UGA pays USCF a management fee of 0.60% per annum on its average daily total net assets.
• UGA also pays brokerage commissions and other expenses, including licensing fees and tax reporting fees.
• For the 30-valuation days ended December 31, 2024, the average daily change in the Benchmark Futures Contract was 0.140%, while the average daily change in the per share NAV of UGA over the same time period was 0.153%.

Sentiment

Score: 6

Explanation: The document is factual and reports on the performance of the fund. While there are positive aspects such as the increase in NAV, there are also negative aspects such as the decrease in the Benchmark Futures Contract prices and the risks associated with the gasoline market. Therefore, the sentiment is neutral.

Positives

• UGAs per share NAV increased by approximately 3.79% for the year ended December 31, 2024.
• Average interest rates earned on short-term investments held by UGA were higher during the year ended December 31, 2024, compared to the year ended December 31, 2023.
• The average daily change in UGAs per share NAV closely tracked the average daily change in the Benchmark Futures Contract for the 30-valuation days ended December 31, 2024.

Negatives

• The Benchmark Futures Contract prices decreased approximately (4.61)% over the year.
• UGA is exposed to risks associated with the gasoline market, including economic conditions, supply-related factors, and price volatility.
• Natural forces in the gasoline futures market known as backwardation and contango may increase UGAs tracking error and/or negatively impact total return.

Risks

• The NAV of UGAs shares relates directly to the value of the Benchmark Futures Contract and other assets held by UGA and fluctuations in the prices of these assets could materially adversely affect an investment in UGAs shares.
• Infectious disease outbreaks like COVID-19 could negatively affect the valuation and performance of UGAs investments.
• Accountability levels, position limits, and daily price fluctuation limits set by the exchanges have the potential to cause tracking error, which could cause the price of shares to substantially vary from the price of the Benchmark Futures Contract.
• Risk mitigation measures that could be imposed by UGAs FCMs have the potential to cause tracking error by limiting UGAs investments, including its ability to fully invest in the Benchmark Futures Contract and other Futures Contracts, which means that the changes in the price of UGAs shares could substantially vary from the price of the Benchmark Futures Contract.
• UGA will be subject to credit risk with respect to counterparties to OTC contracts entered into by UGA.

Future Outlook

UGA intends to continue to pursue its investment objective as described in the report.

Management Comments

• USCF believes that market arbitrage opportunities will cause daily changes in UGAs share price on the NYSE Arca on a percentage basis to closely track daily changes in UGAs per share NAV on a percentage basis.
• USCF further 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 the net effect of these relationships will be that the daily changes in the price of UGAs shares on the NYSE Arca on a percentage basis will closely track, the daily changes in the spot price of gasoline on a percentage basis, plus interest earned on UGAs collateral holdings, less UGAs expenses.

Industry Context

The report provides insights into the gasoline market, including factors affecting supply and demand, price volatility, and the impact of contango and backwardation on total returns. It also discusses the regulatory landscape for commodity interest trading in the United States and other countries.

Comparison to Industry Standards

• The report compares the monthly movements of unleaded gasoline prices versus the monthly movements of the prices of several other energy commodities, such as natural gas, crude oil and diesel-heating oil, as well as several major non-commodity investment asset classes, such as large cap U.S. equities, U.S. government bonds and global equities.
• The report notes that gasoline has historically not demonstrated a strong correlation with equities or bonds over long periods of time.

Legal Proceedings

• On April 6, 2022, USO and USCF 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 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

• UGA pays USCF a management fee of 0.60% per annum on its average daily total net assets.
• USCF pays the fees of the Marketing Agent as well as BNY Mellons fees for performing administrative, custodial, and transfer agency services.
• UGA also pays a portion of the fees and expenses of the independent directors of USCF.

Stakeholder Impact

• The report provides information to shareholders about the performance and financial condition of UGA.
• The report discusses the risks associated with investing in UGA, which is important for shareholders to consider.
• The report provides information about the fees and expenses paid by UGA, which impacts shareholder returns.

Key Dates