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Item 7. Management’s Discussion and Analysis

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This annual report on Form 10-K, including this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding the plans and objectives of management for future operations.

This information may involve known and unknown risks, uncertainties and other factors that may cause UNL’s actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements.

This information may involve known and unknown risks, uncertainties and other factors that may cause UNL’s actual results, performance

or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements.

UNL believes these factors include, but are not limited to, the following:

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and foreign currencies;

market volatility in the crude oil markets and futures markets, in part attributable to the COVID-19 pandemic, related supply chain disruptions, ongoing disputes among oil-producing countries, uncertainties associated with the impact from the coronavirus (COVID-19) pandemic, including:

its impact on the global and U.S.

capital markets and the global and U.S.

economy, the length and duration of the COVID-19 outbreak in the United States as well as worldwide and the magnitude of the economic impact of that outbreak, the effect of the COVID-19 pandemic on USO’s business prospects, including its ability to achieve its objectives, and the effect of the disruptions caused by the COVID-19 pandemic on our ability to continue to effectively manage our business.

market volatility in the natural gas markets and futures markets, in part attributable to the COVID-19 pandemic that began in February 2020 and Russia’s invasion of Ukraine in February 2022.

Forward-looking statements, which involve assumptions and describe UNL’s future plans, strategies and expectations, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project,” the negative of these words, other variations on these words or comparable terminology.

These forward-looking statements are based on assumptions that may be incorrect, and UNL cannot assure investors that the projections included in these forward-looking statements

will come to pass.

These forward-looking statements are based on assumptions that may be incorrect, and UNL cannot assure investors that the projections included in these forward-looking statements will come to pass.

UNL’s actual results could differ materially from those expressed or implied by the forward-looking statements as a result of various factors.

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UNL invests primarily in natural gas futures contracts that are traded on the NYMEX, ICE Futures Exchange (“ICE Futures”) or other U.S.

and foreign exchanges (collectively, “Natural Gas Futures Contracts”) and to a lesser extent, in order to comply with regulatory requirements or in view of market conditions, other natural gas-related investments such as cash-settled options on Natural Gas Futures Contracts, forward contracts for natural gas, cleared swap contracts and non-exchange traded over-the-counter (“OTC”) swaps that are based on the price of natural gas, crude oil and other petroleum-based fuels and indices based on the foregoing (collectively, “Other Natural Gas-Related Investments”).

and foreign exchanges (collectively, “Natural Gas Futures Contracts”) and to a lesser extent, in order to comply with regulatory requirements, risk mitigation measures, liquidity requirements, or in view of market conditions, other natural gas-related investments such as cash-settled options on Natural Gas Futures Contracts, forward contracts for natural gas, cleared swap contracts and non-exchange traded over-the-counter (“OTC”) swaps that are based on the price of natural gas, crude oil and other petroleum-based fuels and indices based on the foregoing (collectively, “Other Natural Gas-Related Investments”).

Market conditions that USCF currently anticipates could cause UNL to invest in Other Natural Gas-Related Investments include those allowing UNL to obtain greater liquidity or to execute transactions with more favorable pricing.

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USCF further believes that daily changes in prices of the Benchmark Futures Contracts have historically closely tracked the daily changes in spot price of natural gas.

USCF believes that the net effect of these relationships will be that the daily changes in the price of UNL’s shares on the NYSE Arca on a percentage basis will closely track the daily changes in the spot price of a MMBtu of natural gas on a percentage basis, plus interest earned on UNL’s collateral holdings, less UNL’s expenses.

USCF believes that the net effect of these relationships will be that the daily changes in the price of UNL’s shares on the NYSE Arca on a percentage basis

will closely track the daily changes in the spot price of a MMBtu of natural gas on a percentage basis, plus interest earned on UNL’s collateral holdings, less UNL’s expenses.

UNL seeks to achieve its investment objective by investing so that the average daily percentage change in UNL’s 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 Contracts over the same period.

Regulatory Disclosure

Accountability Levels, Position Limits and Price Fluctuation Limits .

The regulation of commodity interest trading in the United States and other countries is an evolving area of the law.

Below are certain key regulatory requirements that are, or may be, relevant to UNL.

The various statements made in this summary are subject to modification by legislative action and changes in the rules and regulations of the SEC, Financial Industry Regulatory Authority (“FINRA”), CFTC, NFA, the futures exchanges, clearing organizations and other regulatory bodies.

Pending final resolution of all applicable regulatory requirements, some examples of how new rules and regulations could impact UNL are discussed in “ Item 1.

Business ” in this annual report on Form 10-K.

Exchange Accountability Levels, Position Limits and Price Fluctuation Limits

Designated contract markets (“DCMs”), such as the NYMEX and ICE Futures, have established accountability levels and position limits on the maximum net long or net short futures contracts in commodity interests that any person or group of persons under common trading control (other than as a hedge, which an investment by UNL is not) may hold, own or control.

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In addition, the ICE Futures maintains the same accountability levels, position limits and monitoring authority for its natural gas contracts as the NYMEX.

If UNL and the Related Public Funds exceed these accountability levels for investments in the futures contract for natural gas, the NYMEX and ICE Futures will monitor UNL’s and the Related Public Funds’ exposure and may ask for further information on their activities, including the total size of all positions, investment and trading strategy, and the extent of liquidity resources of UNL and the Related Public Funds.

If deemed necessary by the NYMEX and/or ICE Futures, UNL and the Related Public Funds could be ordered to reduce their aggregate net futures contracts back to the accountability level.

If UNL and the other Related Public Funds exceed these accountability levels for investments in the futures contract for natural gas, the NYMEX and ICE Futures will monitor UNL’s and the other Related Public Funds’ exposure and may ask for further information on their activities, including the total size of all positions, investment and trading strategy, and the extent of liquidity resources of UNL and the other Related Public Funds.

If deemed necessary by the NYMEX and/or ICE Futures, UNL and the other Related Public Funds could be ordered to reduce their aggregate net futures contracts back to the accountability level.

As of December 31, 2022, UNL held - Natural Gas Futures NG contracts traded on the NYMEX and did not hold any ICE Natural Gas Futures contracts.

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For the year ended December 31, 2022, UNL did not exceed any position limits imposed by the NYMEX and the ICE Futures.

The regulation of commodity interest trading in the United States and other countries is an evolving area of the law.

Pending final resolution of all applicable regulatory requirements, some examples of how new rules and regulations could impact UNL are discussed in “Item 1.

Business” and “Item 1A.

Risk Factors” in this annual report on Form 10-K.

Futures Contracts and Position Limits

On October 15, 2020, the CFTC approved the Position Limits Rule.

The Position Limits Rule establishes federal position limits for 25 core referenced futures contracts (comprised of agricultural, energy and metals futures contracts), futures and options linked to the core referenced futures contracts, and swaps that are economically equivalent to the core referenced futures contracts.

The Benchmark Futures Contracts will be subject to position limits under the Position Limits Rule, and UNL’s trading does not qualify for an exemption therefrom.

Federal Position Limits

In October 2020, the CFTC adopted a rule to establish federal position limits for 25 core referenced futures contracts (comprised of agricultural, energy and metals futures contracts), futures and options linked to the core referenced futures contracts, and swaps that are economically equivalent to the core referenced futures contracts (the “Position Limits Rule”).

The limits for futures conracts are currently in effect;

the limits for economically equivalent swaps will become effective in 2023.

Some of the Benchmark Futures Contracts are subject to position limits under the Position Limits Rule, and UNL’s trading does not qualify for an exemption therefrom.

Accordingly, the Position Limits Rule could negatively impact the ability of UNL to meet its investment objective by inhibiting USCF’s ability to effectively invest the proceeds from sales of Creation Baskets of UNL in particular amounts and types of its permitted investments.

In October 2015, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the FDIC, the Farm Credit Administration, and the Federal Housing Finance Agency (each an “Agency” and, collectively, the “Agencies”) jointly adopted final rules to establish minimum margin and capital requirements for registered swap dealers, major swap participants, security-based swap dealers, and major security-based swap participants (“Swap Entities”) that are subject to the jurisdiction of one of the Agencies (such entities, “Covered Swap Entities”, and the joint final rules, the “Final Margin Rules”).

The Final Margin Rules will subject non-cleared swaps and non-cleared security-based swaps between Covered Swap Entities and Swap Entities, and between Covered Swap Entities and financial end users that have material swaps exposure (i.e., an average daily aggregate notional of $8 billion or more in non-cleared swaps calculated in accordance with the Final Margin Rules), to a mandatory two-way minimum initial margin requirement.

The minimum amount of the initial margin required to be posted or collected would be either the amount calculated by the Covered Swap Entity using a standardized schedule set forth as an appendix to the Final Margin Rules, which provides the gross initial margin (as a percentage of total notional exposure) for certain asset classes, or an internal margin model of the Covered Swap Entity conforming to the requirements of the Final Margin Rules that is approved by the Agency having jurisdiction over the particular Covered Swap Entity.

The Final Margin Rules specify the types of collateral that may be posted or collected as initial margin for non-cleared swaps and non-cleared security-based swaps with financial end users (generally cash, certain government, government-sponsored enterprise securities, certain liquid debt, certain equity securities, certain eligible publicly traded debt, and gold);

and sets forth haircuts for certain collateral asset classes.

The Final Margin Rules require minimum variation margin to be exchanged daily for non-cleared swaps and non-cleared security- based swaps between Covered Swap Entities and Swap Entities and between Covered Swap Entities and all financial end-users (without regard to the swaps exposure of the particular financial end-user).

The minimum variation margin amount is the daily mark- to-market change in the value of the swap to the Covered Swap Entity, taking into account variation margin previously posted or collected.

For non-cleared swaps and security-based swaps between Covered Swap Entities and financial end-users, variation margin may be posted or collected in cash or non-cash collateral that is considered eligible for initial margin purposes.

Variation margin is not subject to segregation with an independent, third-party custodian, and may, if permitted by contract, be rehypothecated.

The initial margin requirements of the Final Margin Rules are being phased in over time, and the variation margin requirements of the Final Margin Rules are currently in effect.

UNL is not a Covered Swap Entity under the Final Margin Rules, but it is a financial end-user.

Accordingly, UNL is currently subject to the variation margin requirements of the Final Margin Rules.

However, UNL does not have material swaps exposure and, accordingly, UNL will not be subject to the initial margin requirements of the Final Margin Rules.

The Dodd-Frank Act required the CFTC and the SEC to adopt their own margin rules to apply to a limited number of registered swap dealers, security-based swap dealers, major swap participants, and major security-based swap participants that are not subject to the jurisdiction of one of the Agencies.

On December 16, 2015 the CFTC finalized its margin rules, which are substantially the same as the Final Margin Rules and have the same implementation timeline.

The SEC adopted margin rules for security-based swap dealers and major security-based swap participants on June 21, 2019.

The SEC’s margin rules are generally aligned with the Final Margin Rules and the CFTC’s margin rules, but they differ in a few key respects relating to timing for compliance and the manner in which initial margin must be segregated.

UNL does not currently engage in security-based swap transactions and, therefore, the SEC’s margin rules are not expected to apply to UNL.

Margin for OTC Swaps

Rules put in place by U.S.

federal banking regulators, the CFTC and the SEC require the daily exchange of variation margin and initial margin for swaps between swap dealers, major swap participants, security-based swap dealers, and major security-based swap participants (“Swap Entities”) and swaps between Swap Entities and their counterparties that are “financial end-users” (such rules, the “Margin Rules”).

The Margin Rules require Swap Entities to exchange variation margin with all of their counterparties who are financial end-users.

The minimum variation margin amount is the daily mark-to-market change in the value of the swap, taking into account the amount of variation margin previously posted or collected.

Swap Entities are required to exchange initial margin with their financial end-users who have “material swaps exposure” (i.e., an average daily aggregate notional of $8 billion or more in non-cleared swaps calculated in accordance with the Margin Rules).

The Margin Rules specify the types of collateral that may be posted or collected as initial margin or variation margin (generally cash, certain government, government-sponsored enterprise securities, certain liquid debt, certain equity securities, certain eligible publicly traded debt, and gold) and sets forth haircuts for certain collateral asset classes.

The Fund is not a Swap Entity under the Margin Rules, but it is a financial end-user.

Accordingly, the Fund will be subject to the variation margin requirements of the Margin Rules for any swaps that it enters into.

However, the Fund does not have material swaps exposure and, accordingly, the Fund will not be subject to the initial margin requirements of the Margin Rules.

Mandatory Trading and Clearing of Swaps

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Mandatory clearing and “made available to trade” determinations with respect to additional types of swaps may be issued in the future, and, when finalized, could require UNL to electronically execute and centrally clear certain OTC instruments presently entered into and settled on a bi-lateral basis.

If a swap is required to be cleared, initial

and variation margin requirements are set by the relevant clearing organization, subject to certain regulatory requirements and guidelines.

Additional margin may be required and held by UNL’s FCM.

If a swap is required to be cleared, initial and variation margin requirements are set by the relevant clearing organization, subject to certain regulatory requirements and guidelines.

Additional margin may be required and held by UNL’s FCMs.

Other Requirements for Swaps

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derivatives laws and regulations if it engages in futures and/or swap transactions with non-U.S.

For example, UNL may be impacted by European laws and regulations to the extent that it engages in futures transactions on European exchanges or derivatives transactions with European entities.

For example, UNL may be impacted by European laws and regulations to the extent that it

engages in futures transactions on European exchanges or derivatives transactions with European entities.

Other jurisdictions impose requirements applicable to futures and derivatives that are similar to those imposed by the U.S., including position limits, margin, clearing and trade execution requirements.

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exchanges to be offered and sold in the United States.

Money Market Funds

The SEC adopted amendments to Rule 2a-7 under the Investment Company Act of 1940, as amended (“1940 Act”) which became effective in 2016, to reform money market funds (“MMFs”).

While the rule applies only to MMFs, it may indirectly affect institutional investors such as UNL.

A portion of UNL’s assets that are not used for margin or collateral in the Futures Contracts currently are invested in government MMFs.

UNL does not hold any non-government MMFs and does not anticipate investing in any non- government MMFs.

However, if UNL invests in other types of MMFs besides government MMFs in the future, UNL could be negatively impacted by investing in an MMF that does not maintain a stable $1.00 NAV or that has the potential to impose redemption fees and gates (temporary suspension of redemptions).

Although such government MMFs seek to preserve the value of an investment at $1.00 per share, there is no guarantee that they will be able to do so and UNL may lose money by investing in a government MMF.

An investment in a government MMF is not insured or guaranteed by the Federal Deposit Insurance Corporation (the "FDIC") or any other government agency.

The share price of a government MMF can fall below the $1.00 share price.

UNL cannot rely on or expect a government MMF’s adviser or its affiliates to enter into support agreements or take other actions to maintain the government MMF’s $1.00 share price.

The credit quality of a government MMF’s holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the government MMF’s share price.

Due to fluctuations in interest rates, the market value of securities held by a government MMF may vary.

A government MMF’s share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets.

In a rising rate environment, UNL may not be able to fully invest at prevailing rates until any current investments in Treasury Bills mature in order to avoid selling those investments at a loss.

When interest rates rise, the value of fixed income securities typically falls.

In a rising interest rate environment, UNL may not be able to fully invest at prevailing rates until any current investments in Treasury Bills mature in order to avoid selling those investments at a loss.

Interest rate risk is generally lower for shorter term investments and higher for longer term investments.

The risk to UNL of rising interest rates may be greater in the future due to the end of a long period of historically low rates, the effect of potential monetary policy initiatives, including actions taken by the U.S.

Federal Reserve and other foreign equivalents to curb inflation, and resulting market reaction to those initiatives.

When interest rates fall, UNL may be required to reinvest the proceeds from the sale, redemption or early prepayment of a Treasury Bill or money market security at a lower interest rate.

UNL may lose money by investing in government money market funds.

UNL invests in government money market funds.

Although such government money market funds seek to preserve the value of an investment at $1.00 per share, there is no guarantee that they will be able to do so and UNL may lose money by investing in a government money market fund.

An investment in a government money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation, referred to herein as the FDIC, or any other government agency.

The share price of a government money market fund can fall below the $1.00 share price.

UNL cannot rely on or expect a government money market fund’s adviser or its affiliates to enter into support agreements or take other actions to maintain the government money market fund’s $1.00 share price.

The credit quality of a government money market fund’s holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the government money market fund’s share price.

Due to fluctuations in interest rates, the market value of securities held by a government money market fund may vary.

A government money market fund’s share price can also be negatively affected during periods of high redemption pressures and/or illiquid markets.

Price Movements

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The average price of the Benchmark Futures Contracts started the year at $3.698 per million British thermal shares (“MMBtu”).

The high of the year was on October 5, 2021 when the price of the Benchmark Futures Contracts reached $5.017 per MMBtu.

The low of the year was on March 18, 2021 when the price dropped to $2.688 per MMBtu.

The high of the year was on June 7, 2022 when the price of the Benchmark Futures Contracts reached $8.279 per MMBtu.

The low of the year was on December 31, 2021 when the price dropped to $3.698 per MMBtu.

The year ended with the Benchmark Futures Contracts at $4.296 per MMBtu, an increase of approximately 16.17% over the year.

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The Benchmark Futures Contracts prices listed above began with the February 2022 to January 2023 contracts and ended with the February 2023 to January 2024 contracts.

The increase of approximately 37.22% on the Benchmark Futures Contracts listed above is a hypothetical return only and could not actually be achieved by an investor holding Futures Contracts.

An increase of approximately 16.17% on the Benchmark Futures Contracts listed above is a hypothetical return only and would not actually be realized by an investor holding Futures Contracts.

An investment in Futures Contracts would need to be rolled forward during the time period described in order to simulate such a result.

Furthermore, the change in the nominal price of these differing Futures Contracts, measured from the start of the year to the end of the

year, does not represent the actual benchmark results that UNL seeks to track, which are more fully described below in the section titled “ Tracking UNL’s Benchmark .”

Furthermore, the change in the nominal price of these differing Futures Contracts, measured from the start of the year to the end of the year, does not represent the actual benchmark results that UNL seeks to track, which are more fully described below in the section titled “ Tracking UNL’s Benchmark .”

During the year ended December 31, 2022, the natural gas futures market experienced states of both contango and backwardation.

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As of December 31, 2022, UNL had issued 8,850,000 shares, 1,450,000 of which were outstanding.

As of December 31, 2021, there were 23,100,000 shares registered but not yet issued.

As of December 31, 2022, there were 21,150,000 shares registered and paid for but not yet issued.

UNL has registered 30,000,000 shares since inception.

More shares may have been issued by UNL than are outstanding due to the redemption of shares.

Unlike funds that are registered under the 1940 Act, shares that have been redeemed by UNL cannot be resold by UNL.

As a result, UNL contemplates that additional offerings of its shares will be registered with the SEC in the future in anticipation of additional issuances and redemptions.

In addition, commencing with the registration statement that went effective on April 26, 2022, UNL has an unlimited number of shares registered and available for sale.

As of December 31, 2022, UNL had the following Authorized Participants:

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The increase in the per share NAV for the year ended December 31, 2022, compared to the year ended December 31, 2021, was due primarily to higher prices for natural gas and the related increase in the value of the Natural Gas Futures Contracts in which UNL held and traded.

Average interest rates earned on short-term investments held by UNL, including cash, cash equivalents and Treasuries, were lower during the year ended December 31, 2021, compared to the year ended December 31, 2020.

As a result, the amount of income earned by UNL as a percentage of average daily total net assets was lower during the year ended December 31, 2021, compared to the year ended December 31, 2020.

To the degree that the aggregate yield is lower, the net expense ratio, inclusive of income, will be higher.

The increase in total fees and other expenses excluding management fees for the year ended December 31, 2021, compared to the year ended December 31, 2020 was due primarily to a increase in reporting costs and professional fees.

Average interest rates earned on short-term investments held by UNL, including cash, cash equivalents and Treasuries, were higher during the year ended December 31, 2022, compared to the year ended December 31, 2021.

As a result, the amount of income earned by UNL as a percentage of average daily total net assets was higher during the year ended December 31, 2022, compared to the year ended December 31, 2021.

To the degree that the aggregate yield is higher, the net expense ratio, inclusive of income, will be lower.

The increase in total fees and other expenses excluding management fees for the year ended December 31, 2022, compared to the year ended December 31, 2021 was due primarily to a increase in accrued tax reporting and professional fees.

The increase in total commissions accrued to brokers for the year ended December 31, 2022, compared to the year ended December 31, 2021, was due primarily to a higher number of Natural Gas Futures Contracts being held and traded.

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However, if UNL’s daily changes in its per share NAV had instead exactly tracked the changes in the daily total return of the Benchmark Futures Contracts, UNL would have had an estimated per share NAV of $17.13 as of December 31, 2022, for a total return over the relevant time period of 47.04%.

The difference between the actual per share NAV total return of UNL of 50.52% and the expected total return based on the Benchmark Futures Contract of 50.52% was a difference over the time period of 0.00%, which is to say that UNL’s actual total return matched its benchmark by that percentage.

The difference between the actual per share NAV total return of UNL of 47.98% and the expected total return based on the Benchmark Futures Contracts of 47.04% was a difference over the time period of 0.94%, which is to say that UNL’s actual total return outperformed its benchmark by that percentage.

UNL incurs expenses primarily composed of the management fee, brokerage commissions for the buying and selling of futures contracts, and other expenses.

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However, if UNL’s daily changes in its per share NAV had instead exactly tracked the changes in the daily total return of the Benchmark Futures Contracts, UNL would have had an estimated per share NAV of $11.65 as of December 31, 2021, for a total return over the relevant time period of 50.52%.

The difference between the actual per share NAV total return of UNL of (8.19)% and the expected total return based on the Benchmark Futures Contracts of (8.07)% was an error over the time period of (0.12)%, which is to say that UNL’s actual total return underperformed its benchmark by that percentage.

The difference between the actual per share NAV total return of UNL of 50.52% and the expected total return based on the Benchmark Futures Contracts of 50.52% was a difference over the time period of 0.00%, which is to say that UNL’s actual total return matched its benchmark by that percentage.

UNL incurred expenses primarily composed of the management fee, brokerage commissions for the buying and selling of futures contracts, and other expenses.

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When this income exceeds the level of UNL’s expenses for its management fee, brokerage commissions and other expenses (including ongoing registration fees, licensing fees and the fees and expenses of the independent directors of USCF), UNL will realize a net yield that will tend to cause daily changes in the per share NAV of UNL to track slightly higher than daily changes in the average of the prices of the Benchmark Futures Contracts.

If short-term interest rates rise above these current levels, the level of deviation created by the yield would increase.

If short-term interest rates rise above these levels, the level of deviation created by the yield would increase.

Conversely, if short-term interest rates were to decline, the amount of error created by the yield would decrease.

When short-term yields drop to a level lower than the combined expenses of the management fee and the brokerage commissions, then the tracking error becomes a negative number and would tend to cause the daily returns of the per share NAV to underperform the daily returns of the Benchmark Futures Contracts.

USCF anticipates that interest rates may continue to rise over the from future near historical lows.

It is anticipated that fees and expenses paid by UNL may continue to be higher than interest earned by UNL.

As such, USCF anticipates that UNL could possibly underperform its benchmark so long as interest earned is lower than the fees and expenses paid by UNL.

USCF anticipates that interest rates may continue to rise over the near term from historical lows.

It is anticipated that fees and expenses paid by UNL may continue to be lower than interest earned by UNL.

As such, USCF anticipates that UNL could possibly outperform its benchmark so long as interest earned is greater than the fees and expenses paid by UNL.

Third, UNL may hold Other Natural Gas-Related Investments in its portfolio that may fail to closely track the Benchmark Futures Contracts total return movements.

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Because natural gas demand is seasonal, it is possible for the price of natural gas futures contracts for delivery within one or two months to rapidly move from backwardation into contango and back again within the relatively short period of time of less than one year.

However, the natural gas market has primarily been in a state of contango since late 2014.

Periods of contango or backwardation do not materially impact UNL’s investment objective of having the daily percentage changes in its per share NAV track the daily percentage changes in the price of the Benchmark Futures Contract since the impact of backwardation and contango tend to equally impact the daily percentage changes in price of both UNL’s shares and the Benchmark Futures Contract.

The Russian invasion and related developments have placed upward pressure on the price of the front month natural gas futures contract.

As a result, near to expire contracts trade at a higher price than longer to expire contracts, a situation referred to as “backwardation.” There can be no assurance that the current period of backwardation will continue or how long it may continue.

Periods of contango or backwardation do not materially impact UNL’s investment objective of having the daily percentage changes in its per share NAV track the daily percentage changes in the price of the Benchmark Futures Contracts since the impact of backwardation and contango tend to equally impact the daily percentage changes in price of both UNL’s shares and the Benchmark Futures Contracts.

It is impossible to predict with any degree of certainty whether backwardation or contango will occur in the future.

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Natural Gas Market.

During the year ended December 31, 2021, the average price of the Benchmark Oil Futures Contracts traded in a range between $2.688 and $5.017.

The average price of the Benchmark Oil Futures Contracts increased 37.22% from December 31, 2020 through December 31, 2021, finishing the year at $3.698.

During the year ended December 31, 2022, the Benchmark Natural Gas Futures Contracts traded in a range between $3.698 and $8.279.

The Benchmark Natural Gas Futures Contracts increased 16.171% from December 31, 2021 through December 31, 2022, finishing the year at $4.296.

The number of rigs dedicated to natural gas production rose from 106 at the start of the year to 156 by the end of 2022.

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energy industry to meet demand may constrain natural gas prices except during periods of extreme temperatures.

Mitigation measures taken in the United States to slow the spread of the COVID-19 pandemic led to a decline in natural gas consumption in the industrial sector and by other commercial users during the early stage of the pandemic.

Natural gas prices in the United States have historically been driven by domestic supply and demand.

Natural gas also exhibits seasonal patterns whereby both production and end-user demand increase in autumn and winter months.

possesses abundant sources of natural gas.

The robust ability of the U.S.

energy industry to meet demand constrained natural gas prices over the previous decade and could lead to price constraints again in the future except during periods of extreme temperatures.

In recent years, natural gas exports have increased, including liquid natural gas (LNG) exported to Europe.

Rising international demand has had and will continue to have a growing impact on natural gas prices in the United States.

This is especially true given that the United States is rapidly building, but does not currently possess, the infrastructure necessary to meet all international demand.

While domestic supply and demand are likely to remain the dominant influence on prices in the long term, international demand and extraordinary international events will have a growing influence on price volatility and price direction.

Mitigation measures taken in the United States to slow the spread of the COVID-19 pandemic in 2020 and 2021 led to a decline in natural gas consumption in the industrial sector and by some commercial users.

Simultaneously, natural gas production fell as a result of reduced drilling activity and shut-ins of crude oil wells where natural gas is a byproduct.

Seasonal peak demand and peak production over the 2020 and 2021 pandemic winters fell somewhat below their five year averages, though not dramatically.

While natural gas prices declined steadily during the first half of 2020, prices were not as impacted by the COVID-19 pandemic as other energy commodities.

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While some uncertainty in natural gas prices was likely a result of COVID-19 mitigation efforts, the effects from the COVID-19 pandemic were more muted as compared to the impact on crude oil markets.

The ongoing impact of COVID-19 in the United States could continue to add some pressure to natural gas demand at times.

However, supply and demand of natural gas continue to exhibit normal seasonal patterns, whereby both production and end-user demand increase in autumn and winter months and decline in spring and summer months.

Peak demand and peak production over the last two pandemic winters fell somewhat below their five year averages, though not dramatically.

USCF believes that the war in Ukraine has raised concerns among investors that a global natural gas supply shortage is possible, particularly if Russia reduces or cuts supply to Europe.

This has put upward pressure on natural gas prices globally, beyond the impact of bullish fundamentals that were already in place.

Should the war continue or escalate, or if sanctions or retaliation lead to a reduction in the supply of natural gas from Russia to Europe, then natural gas prices could rise further and prices could become more volatile.

Conversely, should concerns about a natural gas shortage resulting from the war in Ukraine ebb due to an expected or actual resolution of the war, then natural gas prices could decline.

Many factors impact natural gas prices, and the impact of the war in Ukraine must be balanced with other potential events, such as extreme weather or the potential for further outbreaks of COVID-19 and responses to the pandemic.

Natural Gas Price Movements in Comparison to Other Energy Commodities and Investment Categories.

5 unchanged sentences

government bonds and global equities.

It can be seen that over this particular time period, the movement of natural gas on a monthly basis was neither strongly correlated nor inversely correlated with the movements of large cap U.S.

equities, U.S.

Government bonds, global equities, crude oil, diesel-heating oil, or unleaded gasoline.

*PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

Natural Gas - 10 Years

Large Cap US Equities (S&P

US Gov’t Bonds (BEUSG4

Global Equities (FTSE World

Large Cap US Equities

US Gov’t Bonds

Global Equities

Correlation Matrix 10 Years

(BEUSG4 Index)

(FTSE World Index)

Large Cap US Equities (S&P 500)

4 unchanged sentences

The table below covers a more recent, but much shorter, range of dates than the above table.

Over the one year period ended December 31, 2021, the movement of natural gas was strongly correlated with diesel-heating oil, U.S.

government bonds oil, large cap U.S.

equities, global equities crude oil, and unleaded gasoline.

*PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

Natural Gas - 1 Year

Large Cap US Equities (S&P

US Gov’t Bonds (BEUSG4

Global Equities (FTSE World

Large Cap US Equities

US Gov’t Bonds

Global Equities

Correlation Matrix 1 Year

(BEUSG4 Index)

(FTSE World Index)

Large Cap US Equities (S&P 500)

33 unchanged sentences

Income received from UNL’s investments in money market funds and Treasuries is paid to UNL.

During the year ended December 31, 2021, UNL’s expenses, pre and post expense waiver, exceeded the income UNL earned and the cash earned from the sale of Creation Baskets and the redemption of Redemption Baskets.

During the year ended December 31, 2021 UNL used other assets to pay expenses, post expense waiver.

To the extent expenses exceed income, UNL’s NAV will be negatively impacted.

During the year ended December 31, 2022, UNL’s expenses, pre and post expense waiver, did not exceed the income UNL

earned and the cash earned from the sale of Creation Baskets and the redemption of Redemption Baskets.

During the year ended December 31, 2022 UNL did not use other assets to pay expenses, post expense waiver.

To the extent income exceeds expenses, UNL’s NAV will be positively impacted.

USCF endeavors to have the value of UNL’s Treasuries, cash and cash equivalents, whether held by UNL or posted as margin or other collateral, at all times approximate the aggregate market value of its obligations for its investments in its Futures Contracts and Other Natural Gas-Related Investments.

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The counterparty for the Futures Contracts traded on the NYMEX and on most other futures exchanges is the clearinghouse associated with the particular exchange.

In general, in addition to margin required to be posted by the clearinghouse in connection with cleared trades, clearinghouses are backed by their members who may be required to share in the financial burden resulting from the nonperformance of one of their members and, therefore, this additional member support should

significantly reduce credit risk.

UNL is not currently a member of any clearinghouse.

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USCF pays the fees of the Marketing Agent as well as BNY Mellon’s fees for performing administrative, custodial, and transfer agency services.

BNY Mellon’s fees for performing administrative services include those in connection with the preparation of UNL’s financial statements and its SEC, NFA and CFTC reports.

USCF and UNL have also entered into a licensing agreement with the NYMEX pursuant to which UNL and the Related Public Funds, other than BNO, USCI and CPER, pay a licensing fee to the NYMEX.

BNY Mellon’s fees for performing administrative services include those in connection with the preparation of UNL’s financial

statements and its SEC, NFA and CFTC reports.

USCF and UNL have also entered into a licensing agreement with the NYMEX pursuant to which UNL and the other Related Public Funds, other than BNO, USCI and CPER, pay a licensing fee to the NYMEX.

UNL also pays the fees and expenses associated with its tax accounting and reporting requirements.

USCF paid BBH&Co.’s fees for performing administrative services, including those in connection with the preparation of UNL’s financial statements and its SEC, NFA and CFTC reports through May 31, 2020.

In addition to USCF’s management fee, UNL pays its brokerage fees (including fees to an FCM), OTC dealer spreads, any licensing fees for the use of intellectual property, and, subsequent to the initial offering, registration and other fees paid to the SEC, FINRA, or other regulatory agencies in connection with the offer and sale of shares, as well as legal, printing, accounting and other expenses associated therewith, and extraordinary expenses.

7 unchanged sentences

As of December 31, 2022, UNL’s portfolio consisted of 582 Natural Gas Futures NG contracts traded on the NYMEX.

As of December 31, 2021, UNL did not hold any of Futures Contracts traded on the ICE Futures.

For a list of current holdings, please see UNL’s website at www.uscfinvestments.com.

As of December 31, 2022, UNL did not hold any Futures Contracts traded on the ICE Futures.

For a list of UNL’s current holdings, please see UNL’s website at www.uscfinvestments.com.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis