8-K: United States Oil Fund Reports $65 Million Net Loss in May Amidst Trading Losses

The United States Oil Fund, LP reported a net loss of $65 million for May 2024, primarily due to realized and unrealized losses on commodity futures and swap contracts.

Summary

• The United States Oil Fund, LP (USO) released its monthly account statement for May 2024, revealing a net loss of $65,076,041.
• This loss was primarily driven by a $59,359,210 loss on realized trading of commodity futures and a $17,417,340 loss on swap contracts.
• The fund experienced a $7,058,030 unrealized gain on the market value of commodity futures and a $122 unrealized gain on the fair value of swap contracts.
• Dividend income was $1,420,007 and interest income was $4,113,408.
• Total expenses for the month were $924,058, including management fees of $507,873.
• The fund's net asset value decreased from $1,332,274,698 at the beginning of May to $1,262,988,308 at the end of the month.
• There were additions of 8,600,000 shares and withdrawals of 8,600,000 shares during the month.
• The net asset value per share was $74.63 based on 16,923,603 shares.

Sentiment

Score: 3

Explanation: The document reveals a significant net loss and a decrease in net asset value, indicating a negative performance for the month. The sentiment is therefore negative.

Positives

• The fund generated $1,420,007 in dividend income and $4,113,408 in interest income.
• The fund experienced a $7,058,030 unrealized gain on the market value of commodity futures.

Negatives

• The fund experienced significant losses from realized trading of commodity futures and swap contracts.
• The net asset value of the fund decreased substantially during the month.
• Total expenses for the month were $924,058.

Risks

• The fund is exposed to the volatility of commodity futures and swap contracts.
• Unrealized losses can significantly impact the fund's net asset value.
• Fluctuations in market conditions can lead to further losses.

Management Comments

• Stuart P. Crumbaugh, Chief Financial Officer of United States Commodity Funds LLC, stated that the information in the account statement is accurate and complete to the best of his knowledge and belief.

Industry Context

This report reflects the inherent volatility in commodity markets, particularly in oil futures, which can lead to significant fluctuations in the fund's performance. Other commodity-based funds may experience similar volatility.

Comparison to Industry Standards

• The United States Oil Fund's performance is directly tied to the price of West Texas Intermediate (WTI) crude oil futures contracts.
• Other similar exchange-traded products (ETPs) like the Invesco DB Oil Fund (DBO) and the ProShares Ultra Bloomberg Crude Oil (UCO) also experience similar volatility.
• The reported loss is not unusual given the fluctuations in oil prices during May 2024, but the magnitude of the loss is significant.
• A comparison to the performance of these other funds during the same period would provide a more complete picture of the USO's relative performance.

Stakeholder Impact

• Shareholders of the United States Oil Fund will experience a decrease in the value of their holdings due to the reported net loss.
• The fund's performance may impact investor confidence and future investment decisions.

Key Dates

Keywords

United States Oil Fund, USO, Commodity Futures, Swap Contracts, Net Asset Value, Trading Losses, Financial Report, Monthly Statement