United States Oil Fund (USO) 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 USO’s financial statements and the related notes87% rewritten
2. 02Other factors impacting the crude oil market. The supply of and demand for crude oil may also be impacted by changes in interest rates, inflation, and other local or regional market conditions, as well as by the development of alternative energy sources25% rewritten
3. 03Natural disasters, public health disruptions (such as the COVID-19 pandemic), and international armed conflicts could impact the price of commodities and/or the value, pricing and liquidity of USO’s investments or assets which, in turn, could cause the loss of your investment in USO24% rewritten
4. 04Historical performance of USO and the Benchmark Oil Futures Contract is not indicative of future performance
5. 05An investment in USO may provide little or no diversification benefits. Thus, in a declining market, USO may have no gains to offset losses from other investments, and an investor may suffer losses on an investment in USO 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 USO’s NAV may not correlate with daily percentage changes in the price of the Benchmark Oil Futures Contract
8. 08Daily percentage changes in the price of the Benchmark Oil Futures Contract may not correlate with daily percentage changes in the spot price of light, sweet crude oil
9. 09An investment in USO is not a proxy for investing in the oil markets, and the daily percentage changes in the price of the Benchmark Oil Futures Contract, or the NAV of USO, may not correlate with daily percentage changes in the spot price of light, sweet crude oil
10. 10Natural forces in the oil futures market known as “backwardation” and “contango” may increase USO’s tracking error and/or negatively impact total return

Tax Risk

1. 11An investor’s tax liability may exceed the amount of distributions, if any, on its shares
2. 12An investor’s allocable share of taxable income or loss may differ from its economic income or loss on the shares
3. 13USO could be treated as a corporation for U.S. federal income tax purposes, which may substantially reduce the value of the shares
4. 14USO is organized and operated as a limited partnership in accordance with the provisions of the LP Agreement and applicable state law, and therefore, USO has a more complex tax treatment than traditional mutual funds
5. 15If USO is required to withhold tax with respect to any non-U.S. shareholders, the cost of such withholding may be borne by all shareholders
6. 16The impact of changes in U.S. federal income tax laws on USO is uncertain70% rewritten
7. 17USO will be subject to credit risk with respect to counterparties to OTC contracts entered into by USO
8. 18Valuing OTC derivatives may be less certain than valuing exchange-traded and/or cleared financial instruments
9. 19USO’s rights under an OTC contract may be restricted by regulations
10. 20The use of swap agreements may expose USO to early termination risk, which could result in significant losses to USO

Other Risks

1. 21USO is not leveraged, but it could become leveraged if it had insufficient assets to completely meet its margin or collateral requirements relating to its investments75% rewritten
2. 22USO may temporarily limit the offering of Creation Baskets
3. 23Certain of USO’s investments could be illiquid, which could cause large losses to investors at any time or from time to time
4. 24USO 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 USO’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 USO’s shares may result in losses on an investor’s investment in USO at the time the investor sells the shares
8. 28Limited partners and shareholders do not participate in the management of USO and do not control USCF, so they do not have any influence over basic matters that affect USO
9. 29Under Delaware law, a limited partner might be held liable for USO’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 USO will not earn trading gains sufficient to compensate for the fees and expenses that it must pay and as such USO may not earn any profit
11. 31USO 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 USO
13. 33USO is not a registered investment company so shareholders do not have the protections of the 1940 Act
14. 34Trading in international markets could expose USO to credit and regulatory risk
15. 35USO and USCF may have conflicts of interest, which may permit them to favor their own interests to the detriment of shareholders
16. 36USO 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. 37USO 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 USO’s NAV
19. 39The suspension in the ability of Authorized Participants to purchase Creation Baskets could cause USO’s NAV to differ materially from its trading price30% rewritten
20. 40USO 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 or suspend its offers of Creation Baskets
21. 41USO may be subject to interest rate risk, which may prevent USO from investing fully at prevailing rates until any current investments in Treasuries mature in order to avoid selling those investments at a loss24% rewritten
22. 42Inflation 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 expendituresNew
23. 43USO may potentially lose money by investing in government money market funds
24. 44The failure or bankruptcy of a clearing broker could result in a substantial loss of USO’s assets and could impair USO in its ability to execute trades87% rewritten
25. 45The failure or bankruptcy of USO’s Custodian could result in a substantial loss of USO’s assets
26. 46Competing claims of intellectual property rights may adversely affect USO and an investment in USO’s sharesNew
27. 47Due to the increased use of technologies, intentional and unintentional cyber-attacks pose operational and information security risks
28. 48USO’s investment returns could be negatively affected by climate change and greenhouse gas restrictions
29. 49USO and USCF are subjects 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 USO’s and USCF’s financial condition