United States 12 Month Oil Fund (USL) risk factors, FY2025 10-K

Other

1. 01The following risk factors should be read in connection with the other information included in this annual report on Form 10-K, including Management’s Discussion and Analysis of Financial Condition and Results of Operations and USL’s financial statements and the related notes20% rewritten
2. 02Price volatility may possibly cause the total loss of your investment50% rewritten
3. 03Natural disasters, public health disruptions (such as the COVID-19 pandemic), and international armed conflicts could impact the price of crude oil and/or the value, pricing and liquidity of USL investments or assets which, in turn, could cause the loss of your investment in USL34% rewritten
4. 04Historical performance of USL and the Benchmark Oil Futures Contracts is not indicative of future performance
5. 05An investment in USL may provide little or no diversification benefits. Thus, in a declining market, USL may have no gains to offset losses from other investments, and an investor may suffer losses on an investment in USL while incurring losses with respect to other asset classes
6. 06The market price at which investors buy or sell shares may be significantly less or more than NAV
7. 07Daily percentage changes in USL’s NAV may not correlate with daily percentage changes in the average of the prices of the Benchmark Oil Futures Contracts24% rewritten
8. 08Daily percentage changes in the average of the prices of the Benchmark Oil Futures Contracts may not correlate with daily percentage changes in the spot price of crude oil31% rewritten
9. 09An investment in USL is not a proxy for investing in the oil markets, and the daily percentage changes in the price of the Benchmark Oil Futures Contracts, or the NAV of USL, may not correlate with daily percentage changes in the spot price of light, sweet crude oil
10. 10Natural forces in the crude oil futures market known as “backwardation” and “contango” may increase USL’s tracking error and/or negatively impact total return
11. 11Accountability levels, position limits, and daily price fluctuation limits set by the exchanges have the potential to cause tracking error, which could cause the average of the prices of shares to substantially vary from the average of the prices of the Benchmark Oil Futures Contracts23% rewritten

Tax Risk

1. 12An investor’s tax liability may exceed the amount of distributions, if any, on its shares
2. 13An investor’s allocable share of taxable income or loss may differ from its economic income or loss on the shares
3. 14USL could be treated as a corporation for U.S. federal income tax purposes, which may substantially reduce the value of the shares
4. 15USL is organized and operated as a limited partnership in accordance with the provisions of the LP Agreement and applicable state law, and therefore, USL has a more complex tax treatment than traditional mutual funds50% rewritten
5. 16distribution with which to pay the tax liability resulting from the allocation, or may receive a distribution that is insufficient to pay such liabilityNew
6. 17If USL is required to withhold tax with respect to any non-U.S. shareholders, the cost of such withholding may be borne by all shareholders
7. 18The impact of changes in U.S. federal income tax laws on USL is uncertain70% rewritten
8. 19USL will be subject to credit risk with respect to counterparties to OTC contracts entered into by USL
9. 20Valuing OTC derivatives may be less certain than valuing exchange-traded and/or cleared financial instruments

Other Risks

1. 21USL is not leveraged, but it could become leveraged if it had insufficient assets to completely meet its margin or collateral requirements relating to its investments52% rewritten
2. 22USL may temporarily limit the offering of Creation Baskets
3. 23Certain of USL’s investments could be illiquid, which could cause large losses to investors at any time or from time to time
4. 24USL may not meet the listing standards of NYSE Arca, which would adversely impact an investor’s ability to sell shares
5. 25The NYSE Arca may halt trading in USL’s shares, which would adversely impact an investor’s ability to sell shares
6. 26Shareholders that are not Authorized Participants may only purchase or sell their shares in secondary trading markets, and the conditions associated with trading in secondary markets may adversely affect investors’ investment in the shares
7. 27The lack of an active trading market for USL’s shares may result in losses on an investor’s investment in USL at the time the investor sells the shares
8. 28Limited partners and shareholders do not participate in the management of USL and do not control USCF, so they do not have any influence over basic matters that affect USL
9. 29Under Delaware law, a limited partner might be held liable for USL’s obligations as if it were a general partner if the limited partner participates in the control of the partnership’s business and the persons who transact business with the partnership think the limited partner is the general partner
10. 30There is a risk that USL will not earn trading gains sufficient to compensate for the fees and expenses that it must pay and as such USL may not earn any profit
11. 31USL is subject to extensive regulatory reporting and compliance
12. 32Regulatory changes or actions, including the implementation of new legislation are impossible to predict but may significantly and adversely affect USL
13. 33USL is not a registered investment company so shareholders do not have the protections of the 1940 Act
14. 34Trading in international markets could expose USL to credit and regulatory risk
15. 35USL and USCF may have conflicts of interest, which may permit them to favor their own interests to the detriment of shareholders
16. 36USL could terminate at any time and cause the liquidation and potential loss of an investor’s investment and could upset the overall maturity and timing of an investor’s investment portfolio
17. 37USL does not expect to make cash distributions
18. 38An unanticipated number of Redemption Basket requests during a short period of time could have an adverse effect on USL’s NAV83% rewritten
19. 39USL may determine that to allow it to reinvest the proceeds from sales of its Creation Baskets in currently permitted assets in a manner that meets its investment objective it may limit its offers of Creation Baskets
20. 40USL may be subject to interest rate risk, which may prevent USL from investing fully at prevailing rates until any current investments in Treasuries mature in order to avoid selling those investments at a loss
21. 41Inflation is a general increase in the overall price level of goods and services in the economy. The United States Federal Reserve has a stated goal of maintaining a two percent increase in inflation over the long run, as measured by the annual change in the price index for personal consumption expenditures
22. 42USL may potentially lose money by investing in government money market funds
23. 43The failure or bankruptcy of a clearing broker could result in a substantial loss of USL’s assets and could impair USL in its ability to execute trades
24. 44The failure or bankruptcy of USL’s Custodian could result in a substantial loss of USL’s assets
25. 45Competing claims of intellectual property rights may adversely affect USL and an investment in USL’s sharesNew
26. 46Due to the increased use of technologies, intentional and unintentional cyber-attacks pose operational and information security risks
27. 47USL’s investment returns could be negatively affected by climate change and greenhouse gas restrictions
28. 48USCF is the subject of class action, derivative and other litigation. In light of the inherent uncertainties involved in litigation matters, an adverse outcome in this litigation could materially adversely affect USCF’s financial condition