What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-08 compared with 2025-11-07 · 79 added, 124 removed, 369 unchanged (35% of the section changed)

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USL invests primarily in futures contracts for light, sweet crude oil, other types of crude oil, heating oil, gasoline, natural gas and other petroleum-based fuels that are traded on the NYMEX, ICE Futures or other U.S.

and foreign exchanges (collectively, “Oil Futures Contracts”) and to a lesser extent, in order to comply with regulatory requirements, risk mitigation measures (including those that may be taken by USL, USL’s FCMs, counterparties or other market participants), liquidity requirements, or in view of market conditions, other oil-related investments such as cash-settled options on Oil Futures Contracts, forward contracts for oil, cleared swap contracts and OTC swaps that are based on the price of oil, and other petroleum-based fuels, Oil Futures Contracts and indices based on the foregoing (collectively, “Other Oil-Related Investments”).

and foreign exchanges (collectively, “Oil Futures Contracts”) and to a lesser extent, in order to comply with regulatory requirements, risk mitigation measures (including those that may be taken by USL, USL’s FCMs, counterparties or other market participants), liquidity requirements, or in view of market conditions, other oil-related investments such as cash-settled options on Oil Futures Contracts, forward contracts for oil, cleared swap contracts and OTC swaps that are based on the price of oil, other petroleum-based fuels, Oil Futures Contracts and indices based on the foregoing (collectively, “Other Oil-Related Investments”).

For convenience and unless otherwise specified, Oil Futures Contracts and Other Oil-Related Investments collectively are referred to as “Oil Interests” in this quarterly report on Form 10-Q.

USCF believes that market arbitrage opportunities will cause daily changes in USL’s share price on the NYSE Arca on a percentage basis to closely track daily changes in USL’s per share NAV on a percentage basis.

USCF further believes that the daily changes in prices of the Benchmark Oil Futures Contracts have historically tracked the daily changes in spot prices of light, sweet crude oil.

USCF further believes that daily changes in prices of the Benchmark Oil Futures Contracts have historically tracked the daily changes in spot prices of light, sweet crude oil.

USCF believes that the net effect of these relationships will be that the daily changes in the price of USL’s shares on the NYSE Arca on a percentage basis will closely track the daily changes in the spot price of a barrel of light, sweet crude oil on a percentage basis, plus interest earned on USL’s collateral holdings, less USL’s expenses.

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

As of September 30, 2025, USL held 665 futures contracts for light, sweet crude oil traded on the NYMEX and did not hold any Oil Futures Contracts traded on the ICE Futures.

For the nine months ended September 30, 2025, USL did not exceed the accountability levels imposed by the NYMEX or ICE Futures, however, the aggregated total of certain of the Related Public Funds did exceed the accountability levels.

As of March 31, 2026, USL held 758 futures contracts for light, sweet crude oil traded on the NYMEX and did not hold any Oil Futures Contracts traded on the ICE Futures.

For the three months ended March 31, 2026, USL did not exceed the accountability levels imposed by the NYMEX or ICE Futures, however, the aggregated total of certain of the Related Public Funds did exceed the accountability levels.

No action was taken by NYMEX and USL did not reduce the number of Oil Futures Contracts held as a result.

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The foregoing accountability levels and position limits are subject to change.

For the nine months ended September 30, 2025, USL did not exceed any position limits.

For the three months ended March 31, 2026, USL did not exceed any position limits.

Federal Position Limits

Part 150 of the CFTC’s regulations (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 that all market participants must comply with, with certain exemptions.

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

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

Accordingly, the Position Limits Rule could inhibit USL’s ability to invest in the relevant Benchmark Oil Futures Contracts and thereby could negatively impact the ability of USL to meet its investment objective.

USL has not limited the size of its offering and intends to utilize substantially all of its proceeds to purchase Oil Futures Contracts and Other Oil-Related Investments to the extent possible.

If USL encounters accountability levels, position limits, or price fluctuation limits for Oil Futures Contracts on the NYMEX or ICE Futures, it may then, if permitted under applicable regulatory requirements, purchase Oil Futures Contracts on other exchanges that trade listed crude oil futures or enter into swaps or other transactions to meet its investment objective.

USL has not limited the size of its offering and intends to utilize substantially all of its proceeds to purchase Benchmark Oil Futures Contracts and Other Oil-Related Investments to the extent possible.

If USL encounters accountability levels, position limits (including those set by the Position Limits Rule), or price fluctuation limits for the Benchmark Oil Futures Contracts on the NYMEX or ICE Futures, it may then, if permitted under applicable regulatory requirements, purchase the Benchmark Oil Futures Contracts on other exchanges that trade listed crude oil futures or enter into swaps or other permitted investments to meet its investment objective.

In addition, if USL exceeds accountability levels on either the NYMEX or ICE Futures, and is required by such exchanges to reduce its holdings, such reduction could potentially cause a tracking error between the price of USL’s shares and the average of the prices of the Benchmark Oil Futures Contracts.

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Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including public health disruptions, pandemics and epidemics (for example, the COVID-19 pandemic), can be highly disruptive to economies and markets.

Such events can, directly or indirectly, negatively impact, and/or cause volatility in, the price of crude oil and the value, pricing, and liquidity of the investments or other assets held by USL.

Geopolitical conflict, including war and armed conflicts (such as the Russia-Ukraine war, conflicts in the Middle East, and the expansion of such conflicts in surrounding areas), sanctions, the introduction of or changes in tariffs or trade barriers, global or local recessions, and acts of terrorism, can also, directly or indirectly, negatively impact, and/or cause volatility in, the price of crude oil and the value, pricing, and liquidity of the investments or other assets held by USL.

Such events can, directly or indirectly, negatively impact, and/or cause volatility in, the price of commodities such as crude oil and the value, pricing, and liquidity of the investments or other assets held by USL.

Geopolitical conflict, including war and armed conflicts (such as the Russia-Ukraine war, military conflicts in the Middle East, and the expansion of such conflicts in surrounding areas), sanctions, the introduction of or changes in tariffs or trade barriers, global or local recessions, and acts of terrorism, can also, directly or indirectly, negatively impact, and/or cause volatility in, the price of crude oil and the value, pricing, and liquidity of the investments or other assets held by USL.

A negative impact on, or volatility in, the price of crude oil or the value, pricing and liquidity of USL’s investments or other assets resulting from the occurrence of any of the aforementioned events, or similar events, could cause you to lose all, or substantially all, of your investment in USL.

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

In addition, in rising interest rate environments, it is possible that the Treasuries held by USL will decline in value.

In addition, in rising interest rate environments, it is possible that a Treasury Bill held by USL will decline in value.

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

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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.

Following the COVID-19 pandemic, the United States experienced inflation above the Federal Reserve’s stated two-percent goal.

Other world economies similarly experienced elevated inflation rates.

The Federal Reserve increased interest rates and successfully reduced inflation so that it is close to the stated two percent goal.

As a result, in 2024, the Federal Reserve began reducing interest rates.

However, the rate of inflation in the United States is still above the stated two percent goal.

Inflation has the effect of eroding the value of cash or bonds.

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Price Movements

Crude oil futures prices were volatile during the nine months ended September 30, 2025.

Crude oil futures prices were volatile during the three months ended March 31, 2026.

The average price of the Benchmark Oil Futures Contracts started the period at $57.04 per barrel.

The high of the period was on January 15, 2025 when the average price reached $73.51 per barrel.

The low for the period was on May 5, 2025, which was $56.56 per barrel.

The period ended with the average price of the Benchmark Oil Futures Contracts at $61.41 per barrel, a decrease of approximately (11.89)% over the period.

USL’s per share NAV began the period at $38.01 and ended the period at $35.50 on September 30, 2025, a decrease of approximately (6.60)% over the period.

The average Benchmark Oil Futures Contracts prices listed above began with the February 2025 to January 2026 contracts and ended with the November 2025 to October 2026 contracts.

The decrease of approximately (11.89)% on the average price of the Benchmark Oil Futures Contracts listed above is a hypothetical return only and would not actually be realized by an investor holding Oil Futures Contracts.

The high of the period was on March 20, 2026 when the average price reached $83.38 per barrel.

The average low for the period was on January 7, 2026, which was $55.85 per barrel.

The period ended with the average price of the Benchmark Oil Futures Contracts at $78.77 per barrel, an increase of approximately 38.10% over the period.

USL’s per share NAV began the period at $33.31 and ended the period at $47.79 on March 31, 2026, an increase of approximately 43.47% over the period.

The average Benchmark Oil Futures Contracts prices listed above began with the February 2026 to January 2027 contracts and ended with the May 2026 to April 2027 contracts.

The increase of approximately 38.10% on the average price of the Benchmark Oil Futures Contracts listed above is a hypothetical return only and would not actually be realized by an investor holding Oil Futures Contracts.

An investment in Oil 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 Oil Futures Contracts, measured from the start of the year to the end of the year, does not represent the actual benchmark results that USL seeks to track, which are more fully described below in the section titled “Tracking USL’s Benchmark.”

During the nine months ended September 30, 2025, the crude oil futures market experienced states of mild backwardation.

During the three months ended March 31, 2026, the crude oil futures market was in a state of backwardation.

On days when the market was in contango the price of the near month crude Oil Futures Contract is lower than the price of the next month crude Oil Futures Contract, or contracts further away from expiration.

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Results of Operations.

As of September 30, 2025, USL had 1,150,000 shares outstanding.

As of March 31st, 2026, USL had issued 1,250,000 shares outstanding.

On April 28, 2023, the SEC declared effective a registration statement filed by USL that registered an unlimited number of shares.

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

As of September 30, 2025, USL had the following Authorized Participants:

Citadel Securities LLC, Citigroup Global Markets Inc., Goldman Sachs & Company, Jane Street Capital LLC, JP Morgan Securities Inc., Merrill Lynch Professional Clearing Corp., Morgan Stanley & Company, Inc., RBC Capital Markets LLC, SG Americas Securities LLC, and Virtu Americas LLC.

For the Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024

Nine months ended

September 30, 2025

September 30, 2024

Average daily total net assets

Dividend and interest income earned on Treasuries, cash and/or cash equivalents

Annualized yield based on average daily total net assets

Management fee

Total fees and other expenses excluding management fees

Total commissions accrued to brokers

Total commissions as annualized percentage of average total net assets

Portfolio Expenses .

USL’s expenses consist of investment management fees, brokerage fees and commissions, certain offering costs, licensing fees, registration fees, the fees and expenses of the independent directors of USCF and expenses relating to tax accounting and reporting requirements.

The management fee that USL pays to USCF is calculated as a percentage of the total net assets of USL.

The fee is accrued daily and paid monthly.

Average interest rates earned on short-term investments held by USL, including cash, cash equivalents and Treasuries, were lower during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

As a result, the amount of income earned by USL as a percentage of average daily total net assets was lower during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

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

The decrease in total fees and other expenses excluding management fees for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was due primarily to a decrease in professional fees and lower brokerage commissions.

The decrease in total commissions accrued to brokers for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was due primarily to a lower number of Oil Futures Contracts being held and traded.

For the Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024

As of March 31, 2026, USL had the following Authorized Participants:

Citadel Securities LLC, Citigroup Global Markets Inc., Goldman Sachs & Company, JP Morgan Securities Inc., Merrill Lynch Professional Clearing Corp., Morgan Stanley & Company, Inc., RBC Capital Markets LLC, SG Americas Securities LLC, Virtu Americas LLC., and Jane Street Capital LLC.

For the Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025

Three months ended

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

Average daily total net assets

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The fee is accrued daily and paid monthly.

Average interest rates earned on short-term investments held by USL, including cash, cash equivalents and Treasuries, were lower during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

As a result, the amount of income earned by USL as a percentage of average daily total net assets was lower during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Average interest rates earned on short-term investments held by USL, including cash, cash equivalents and Treasuries, were lower during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

As a result, the amount of income earned by USL as a percentage of average daily total net assets was lower during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

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

The decrease in total fees and other expenses excluding management fees for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, was due primarily to a decrease in professional fees and lower brokerage commissions.

The decrease in total commissions accrued to brokers for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, was due primarily to a lower number of Oil Futures Contracts being held and traded.

The decrease in total fees and other expenses excluding management fees for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was due primarily to a decrease in professional fees.

The increase in total commissions accrued to brokers for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was due primarily to a higher number of Oil Futures Contracts being held and traded.

Tracking USL’s Benchmark

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Specifically, USCF seeks to manage the portfolio such that over any rolling period of 30-valuation days, the average daily change in USL’s per share NAV is within a range of 90% to 110% (0.9 to 1.1) of the average daily change in the prices of the Benchmark Oil Futures Contracts.

As an example, if the average daily movement of the average of the prices of the Benchmark Oil Futures Contracts for a particular 30-valuation day time period was 0.50% per day, USCF would attempt to manage the portfolio such that the average daily movement of the per share NAV during that same time period fell between 0.45% and 0.55% (i.e., between 0.9 and 1.1 of the benchmark’s results).

As an example, if the average daily movement of the average of the prices of the Benchmark Oil Futures Contracts for a particular 30-valuation

day time period was 0.50% per day, USCF would attempt to manage the portfolio such that the average daily movement of the per share NAV during that same time period fell between 0.45% and 0.55% (i.e., between 0.9 and 1.1 of the benchmark’s results).

USL’s portfolio management goals do not include trying to make the nominal price of USL’s per share NAV equal to the average of the nominal prices of the current Benchmark Oil Futures Contracts or the spot price for light, sweet crude oil.

USCF believes that it is not practical to manage the portfolio to achieve such an investment goal when investing in Oil Futures Contracts and Other Oil-Related Investments.

For the 30-valuation days ended September 30, 2025, the average daily change in the Benchmark Oil Futures Contracts was (0.001)%, while the average daily change in the per share NAV of USL over the same time period was 0.011%.

For the 30-valuation days ended March 31, 2026, the average daily change in the Benchmark Oil Futures Contracts was 0.986%, while the average daily change in the per share NAV of USL over the same time period was 0.996%.

The average daily difference was 0.010% (or 1 basis points, where 1 basis point equals 1/100 of 1%), meaning that over this time period USL’s NAV performed within the plus or minus 10% range established as its benchmark tracking goal.

Since the commencement of the offering of USL’s shares to the public on December 6, 2007 to September 30, 2025, the average daily change in the Benchmark Oil Futures Contracts was 0.013%, while the average daily change in the per share NAV of USL over the same time period was 0.014%.

Since the commencement of the offering of USL’s shares to the public on December 6, 2007 to March 31, 2026, the average daily change in the Benchmark Oil Futures Contracts was 0.019%, while the average daily change in the per share NAV of USL over the same time period was 0.021%.

The average daily difference was 0.002% (or 0.2 basis points, where 1.0 basis point equals 1/100 of 1%), meaning that over this time period USL’s NAV performed within the plus or minus 10% range established as its benchmark tracking goal.

The following two charts demonstrate the correlation between the changes in USL’s NAV and the changes in the Benchmark Oil Futures Contracts.

The first chart below shows the daily movement of USL’s per share NAV versus the daily movement of the Benchmark Oil Futures Contracts for the 30 valuation day period ended September 30th, 2025, the last trading day in September.

The second chart below shows the monthly total returns of USL as compared to the monthly value of the Benchmark Oil Futures Contracts for the five years ended September 30, 2025.

The first chart below shows the daily movement of USL’s per share NAV versus the daily movement of the Benchmark Oil Futures Contracts for the 30 valuation day period ended March 31, 2026, the last trading day in March.

The second chart below shows the monthly total returns of USL as compared to the monthly value of the Benchmark Oil Futures Contracts for the five years ended March 31, 2026.

*PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

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An alternative tracking measurement of the return performance of USL versus the return of its Benchmark Oil Futures Contracts can be calculated by comparing the actual average of the prices of its return of USL, measured by changes in its per share NAV, versus the expected changes in its per share NAV under the assumption that USL’s returns had been exactly the same as the daily changes in the average of the prices of its Benchmark Oil Futures Contracts.

For the nine months ended September 30, 2025, the actual total return of USL as measured by changes in its per share NAV was (6.60)%.

This is based on an initial per share NAV of $38.01 as of December 31, 2024 and an ending per share NAV as of September 30, 2025 of $35.50.

For the three months ended March 31, 2026, the actual total return of USL as measured by changes in its per share NAV was 43.47%.

This is based on an initial per share NAV of $33.31 as of December 31, 2025 and an ending per share NAV as of March 31, 2026 of $47.79.

During this time period, USL made no distributions to its shareholders.

However, if USL’s daily changes in its per share NAV had instead exactly tracked the changes in the daily total return of the Benchmark Oil Futures Contracts, USL would have had an estimated per share NAV of $34.68 as of September 30, 2025, for a total return over the relevant time period of (8.76)%.

However, if USL’s daily changes in its per share NAV had instead exactly tracked the changes in the daily total return of the Benchmark Oil Futures Contracts, USL would have had an estimated per share NAV of $47.50 as of March 31, 2026, for a total return over the relevant time period of 42.59%.

The difference between the actual per share NAV total return of USL of 43.47% and the expected total return based on the Benchmark Oil Futures Contracts of 42.59% was a difference over the time period of 0.88%, which is to say that USL’s actual total return outperformed its benchmark by that percentage.

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The impact of these expenses, offset by interest and dividend income, and net of positive or negative execution, tends to cause daily changes in the per share NAV of USL to track slightly lower or higher than daily changes in the price of the Benchmark Oil Futures Contracts.

By comparison, for the nine months ended September 30, 2024, the actual total return of USL as measured by changes in its per share NAV was 1.93%.

This is based on an initial per share NAV of $35.23 as of December 31, 2023 and an ending per share NAV as of September 30, 2024 of $35.91.

By comparison, for the three months ended March 31, 2025, the actual total return of USL as measured by changes in its per share NAV was 0.53%.

This is based on an initial per share NAV of $38.01 as of December 31, 2024 and an ending per share NAV as of March 31, 2025 of $38.21.

During this time period, USL made no distributions to its shareholders.

However, if USL’s daily changes in its per share NAV had instead exactly tracked the changes in the daily total return of the Benchmark Oil Futures Contracts, USL would have had an estimated per share NAV of $34.87 as of September 30, 2024, for a total return over the relevant time period of (1.02)%.

However, if USL’s daily changes in its per share NAV had instead exactly tracked the changes in the daily total return of the Benchmark Oil Futures Contracts, USL would have had an estimated per share NAV of $37.93 as of March 31, 2025, for a total return over the relevant time period of (0.22)%.

The difference between the actual per share NAV total return of USL of 0.53% and the expected total return based on the Benchmark Oil Futures Contracts of (0.22)% was a difference over the time period of 0.75%, which is to say that USL’s actual total return outperformed its benchmark by that percentage.

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

The impact of these expenses, offset by interest and dividend income, and net of positive or negative execution, tended to cause daily changes in the per share NAV of USL to track slightly lower or higher than daily changes in the price of the Benchmark Oil Futures Contracts.

There are three factors that typically have impacted or are most likely to impact USL’s ability to accurately track its Benchmark Oil Futures Contracts in addition to the foregoing.

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In that case, USL may pay a price that is higher, or lower, than the closing settlement price of the Benchmark Oil Futures Contracts, which could cause the changes in the daily per share NAV of USL to either be high or low relative to the daily changes in the average of the prices of the Benchmark Oil Futures Contracts.

During the nine months ended September 30, 2025, USCF attempted to minimize the effect of these transactions by seeking to execute its purchase or sale of the Benchmark Oil Futures Contracts at, or as close as possible to, the end of the day settlement price.

During the three months ended March 31, 2026, USCF attempted to minimize the effect of these transactions by seeking to execute its purchase or sale of the Benchmark Oil Futures Contracts at, or as close as possible to, the end of the day settlement price.

However, it may not always be possible for USL to obtain the settlement price and there is no assurance that failure to obtain the closing settlement price in the future will not adversely impact USL’s attempt to track the Benchmark Oil Futures Contracts.

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At the same time, USL earns dividend and interest income on its cash, cash equivalents and Treasuries.

USL is not required to distribute any portion of its income to its shareholders and did not make any distributions to shareholders during the three months ended September 30, 2025.

USL is not required to distribute any portion of its income to its shareholders and did not make any distributions to shareholders during the three months ended March 31, 2026.

Interest payments, and any other income, were retained within the portfolio and added to USL’s NAV.

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In that case, the error in tracking the Benchmark Oil Futures Contracts could result in daily changes in the per share NAV of USL that are either too high, or too low, relative to the daily changes in the average of the prices of the Benchmark Oil Futures Contracts.

During the three months ended September 30, 2025, USL did not hold any Other Oil-Related Investments.

During the three months ended March 31, 2026, USL did not hold any Other Oil-Related Investments.

If USL increases in size, and due to its obligations to comply with market conditions, regulatory limits, and risk mitigation measures imposed by its FCMs, USL may invest in Other Oil-Related Investments which may have the effect of increasing transaction related expenses and may result in increased tracking error.

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Likewise, contango returned to moderate levels in May of 2020.

During the nine months ended September 30, 2025, crude oil futures were in a state of contango as measured by the difference between the front month and the second month contract.

During the three months ended March 31, 2026, crude oil futures were in a state of contango as measured by the difference between the front month and the second month contract.

USCF believes that holding futures contracts whose expiration dates are spread out over a 12 month period of time will cause the total return of such a portfolio to vary compared to a portfolio that holds only a single month’s contract (such as the near month contract).

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Crude Oil Market.

During the nine months ended September 30, 2025, the average price of the Benchmark Oil Futures Contracts traded in a range between $56.56 to $73.51.

The average price of the Benchmark Oil Futures Contracts decreased (11.89)% from the end of 2024 through September 30, 2025 finishing the quarter at $61.41.

The early 2020’s witnessed extraordinary events in global financial markets, and crude oil offered no exception.

During the first half of 2020, simultaneous demand and supply shocks led to unparalleled risk and volatility in oil futures markets.

The oil demand shock was caused by the COVID-19 pandemic and the oil supply shock was caused by a Saudi-Russia price war.

These twin shocks, which had never occurred at the same time before, caused several unprecedented effects.

First, the front month WTI Oil Futures Contract traded at negative prices for the first and only time in history.

Crude oil hit an all-time closing low of $(37.63) on April 20, 2020.

Second, annualized volatility of front month WTI crude oil futures prices reached 984% in May 2020 after averaging 25% in the first two months of 2020 and 35% in 2019.

The volatility includes several record-breaking returns that occurred between March and May of 2020.

Third, WTI Oil Futures Contracts, which typically move together (i.e., increase or decrease) about 99% of the time, often moved in opposite directions, with daily correlation dropping to (24%).

Fourth, futures curves, which can exhibit conditions known as “contango” and “backwardation” (as discussed above), moved into an extreme formation that some market experts referred to as “super contango.” This was a result of extreme bearishness in spot prices, which saw the front month WTI Oil Futures Contract detach from the rest of the futures curve and fall to an extreme position relative to later dated futures contracts.

As economies reopened and OPEC+ supply cuts were absorbed by the market, WTI crude oil prices rose from all-time lows and conditions for a new bull market emerged.

Bullish fundamentals for crude oil prices were already in place when Russia invaded Ukraine in February of 2022.

The war led to another round of heightened volatility and higher prices.

Crude oil peaked in May 2022, then declined for the remainder of the year.

Since early 2023, crude oil prices have traded mostly between approximately $65 to $80, with several prominent price reversals.

In the third quarter of 2025, U.S.

crude oil production averaged 13.4 mbd.

production rose significantly over the last five years.

OPEC crude production declined from late 2022 through the third quarter of 2024 as the cartel supported prices with overall quotas and voluntary output cuts by certain countries, particularly Saudi Arabia.

OPEC output rose during the nine months ending September 30, 2025, but remained below pre- and post-pandemic highs.

OPEC fiercely supported prices with voluntary cuts and production quotas from mid-2022 to late 2024.

The cartel announced plans to begin unwinding voluntary cuts and increasing quotas in 2024 and has begun to do so after delaying and adjusting these plans several times.

While OPEC has steadily increased output several times in 2025, it has also reaffirmed its commitment to maintaining oil market stability and retains the flexibility to change plans as market conditions warrant.

Nevertheless, the long-expected and repeatedly delayed reduction of quotas and voluntary cuts is finally underway.

While not a complete policy reversal, the “OPEC put” which kept a floor on prices over the last several years has likely moved lower.

During the three months ended March 31, 2026, the average price of the Benchmark Oil Futures Contracts traded in a range between $55.85 to $83.38.

The average price of the Benchmark Oil Futures Contracts increased 38.10% from the end of 2025 through March 31, 2026 finishing the quarter at $78.77.

The Iran War was the primary driver of crude oil prices during the first quarter of 2026.

Global crude oil supply exceeded demand in January and February of 2026.

Supply plunged below demand after the start of hostilities and Iran’s closure of the Strait of Hormuz, which threatens approximately 20% of the world’s oil supply.

Energy Information Association estimated that Iraq, Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, and Bahrain collectively shut in 7.5 million barrels per day (mbd) of crude oil production by March 31, 2026.

The daily amount of crude oil supply impacted by the war is expected to increase the longer the Strait of Hormuz remains closed and infrastructure in oil producing countries remains offline.

crude oil production averaged approximately 13.7 mbd in the first quarter of 2026, down from an all-time high of 13.8 mbd reached in October of 2025.

However, U.S.

production has increased significantly over the last five years.

OPEC crude production, which had been rising since 2024, dropped significantly from 29.6 mbd in February to 22.1 mbd in March.

OPEC output had been rising prior to the war as the cartel continued to gradually unwind voluntary cuts and quotas that were established to support market prices between 2022 and 2024.

Russia and OPEC have still not returned to pre-pandemic production levels, while the U.S.

has become the world’s largest crude oil producing nation and other oil producing nations have also increased their output.

In the U.S., the Trump administration has aggressively called for increased domestic production and its actions have and will make more drilling possible.

In the U.S., the Trump administration has aggressively called for increased domestic production, and its actions have and will continue to make more drilling possible.

However, U.S.

drillers have shown restraint in recent years, and production may not rise as much in the future as it has in the recent past.

drillers have shown restraint in recent years, so production may not rise as much in the future as it has in the recent past.

Technology, geology, and economics tend to be larger determinants of U.S.

production levels than political policy.

In April of 2025, the Trump administration announced large and widespread tariffs on trading partners.

While no tariffs on crude oil itself were announced, and the administration later paused tariff implementation and announced changing tariff levels on a country-by-country basis, the overall impact of the administration’s actions may increase the risk of a global economic slowdown or recession,

which would reduce demand for crude oil.

As negotiations with trading partners continue, final trade policy remains elusive and crude oil prices may be volatile as a result.

The current geopolitical situation adds complexity to the supply-demand equation.

In June of 2025, Israel and the United States attacked Iran’s nuclear facilities, raising speculation that Iran might attempt to close the Strait of Hormuz.

As approximately 20% of global petroleum consumption transits the Strait daily, this could have a significant effect on prices.

As it stands, Iran did not close the Strait, and prices fell back to the mid-$65 range after briefly topping $75.

Global tensions, with existing and potential conflicts in various regions, remain a flash point for risk to crude oil supply, which could raise prices.

Conversely, any resolution of geopolitical conflicts could ease supply disruptions, sanctions, and price volatility, which could lower prices.

The potential impact of the Iran war on producer’s appetites for increased drilling remains uncertain.

Other Trump administration policies have introduced uncertainty into crude oil markets, including on-and-off tariffs and tariff threats.

The overall impact of the administration’s actions could increase the risk of a global economic slowdown or recession, which could reduce demand for crude oil.

Ongoing global tensions, with existing and potential conflicts in various regions, could increase supply disruptions, which could raise prices.

Conversely, any resolution of geopolitical conflicts could further ease supply disruptions, sanctions, and price volatility, which could lower prices.

Crude Oil Price Movements in Comparison to Other Energy Commodities and Investment Categories .

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The correlation is scaled between 1 and -1, where 1 indicates that the two investment options move up or down in price or value together, known as “positive correlation,” and -1 indicates that they move in completely opposite directions, known as “negative correlation.” A correlation of 0 would mean that the movements of the two are neither positively nor negatively correlated, known as “non-correlation.” That is, the investment options sometimes move up and down together and other times move in opposite directions.

For the ten-year time period between September 30, 2015 and September 30, 2025, the table below compares the monthly movements of crude oil prices versus the monthly movements of the prices of several other energy commodities, such as natural gas, diesel-heating oil, and unleaded gasoline, as well as several major non-commodity investment asset classes, such as large cap U.S.

For the ten-year time period between March 31, 2016 and March 31, 2026, the table below compares the monthly movements of crude oil prices versus the monthly movements of the prices of several other energy commodities, such as natural gas, diesel-heating oil, and unleaded gasoline, as well as several major non-commodity investment asset classes, such as large cap U.S.

equities, U.S.

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*PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

Crude Oil - 1 Years

Crude Oil - 1 Year

Large Cap US Equities

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In addition, USCF believes that, when measured over time periods shorter than ten years, there will always be some periods where the correlation of crude oil to equities and bonds will be either more strongly positively correlated or more strongly negatively correlated than the long-term historical results suggest.

The correlations between crude oil, natural gas, diesel-heating oil and gasoline are relevant because USCF endeavors to invest USL’s assets in Oil Futures Contracts and Other Oil-Related Investments so that the daily changes in percentage terms in USL’s per share NAV correlate as closely as possible with daily changes in percentage terms in the averages of the prices of the Benchmark Oil Futures Contracts.

The correlations between crude oil, natural gas, diesel-heating oil and gasoline are relevant because USCF endeavors to invest USL’s assets in Oil Futures Contracts and Other Oil-Related Investments so that daily changes in percentage terms in USL’s per share NAV correlate as closely as possible with daily changes in percentage terms in the average of the prices of the Benchmark Oil Futures Contracts.

If certain other fuel-based commodity futures contracts do not closely correlate with the crude-oil futures contracts, then their use could lead to greater tracking error.

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

During the three months ended September 30, 2025, USL’s expenses did not exceed the income USL earned and the cash earned from the sale of Creation Baskets and the redemption of Redemption Baskets.

During the three months ended September 30, 2025, USL did not use other assets to pay expenses.

During the three months ended March 31, 2026, USL’s expenses did not exceed the income USL earned and the cash earned from the sale of Creation Baskets and the redemption of Redemption Baskets.

During the three months ended March 31, 2026, USL did not use other assets to pay expenses.

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

Although permitted to do so under its Limited Partnership Agreement, USL has not leveraged, and does not intend to leverage, its assets through borrowings or otherwise, and makes its investments accordingly.

Consistent with the foregoing, USL’s investment will take into account the need for USL to maintain adequate liquidity to meet its margin and collateral requirements and to avoid, to the extent reasonably possible, USL becoming leveraged.

Although permitted to do so under its LP Agreement, USL has not leveraged, and does not intend to leverage, its assets through borrowings or otherwise, and makes its investments accordingly.

Consistent with the foregoing, USL’s investments will take into account the need for USL to maintain adequate liquidity to meet its margin and collateral requirements and to avoid, to the extent reasonably possible, USL becoming leveraged.

If market conditions require it, these risk reduction procedures, including changes to USL’s investments, may occur on short notice.

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Such market conditions could prevent USL from promptly liquidating its positions in Oil Futures Contracts.

During the three months ended September 30, 2025, USL did not purchase or liquidate any of its positions while daily limits were in effect;

During the three months ended March 31, 2026, USL did not purchase or liquidate any of its positions while daily limits were in effect;

however, USL cannot predict whether such an event may occur in the future.

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In addition, the CFTC requires FCMs to hold in a secure account USL’s assets related to foreign Oil Futures Contracts.

As of September 30, 2025, USL held cash deposits and short-term investments in the amount of $42,430,813 with the custodian and FCMs.

As of March 31, 2026, USL held cash deposits and short-term investments in the amount of $11,725,403 with the custodian and FCMs.

Some or all of these amounts held by a custodian or an FCM, as applicable, may be subject to loss should USL’s custodian or FCMs, as applicable, cease operations.

Off Balance Sheet Financing

As of September 30, 2025, USL had no loan guarantee, credit support or other off-balance sheet arrangements of any kind other than agreements entered into in the normal course of business, which may include indemnification provisions relating to certain risks that service providers undertake in performing services which are in the best interests of USL.

As of March 31, 2026, USL had no loan guarantee, credit support or other off-balance sheet arrangements of any kind other than agreements entered into in the normal course of business, which may include indemnification provisions relating to certain risks that service providers undertake in performing services which are in the best interests of USL.

While USL’s exposure under these indemnification provisions cannot be estimated, they are not expected to have a material impact on USL’s financial position.

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In addition to USCF’s management fee, USL pays its brokerage fees (including fees to the FCMs), 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.

The latter are expenses not incurred in the ordinary course of USL’s business, including expenses relating to the indemnification of any person against liabilities and obligations to the extent permitted by law and under the LP Agreement, the bringing or defending of actions in law or in equity or otherwise conducting litigation and incurring legal expenses and the settlement of claims and litigation.

The latter are expenses not incurred in the ordinary course of USLs business, including expenses relating to the indemnification of any person against liabilities and obligations to the extent permitted by law and under the LP Agreement, the bringing or defending of actions in law or in equity or otherwise conducting litigation and incurring legal expenses and the settlement of claims and litigation.

Commission payments to an FCM are on a contract-by-contract, or round turn, basis.

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The parties cannot anticipate the amount of payments that will be required under these arrangements for future periods, as USL’s per share NAVs and trading levels to meet its investment objective will not be known until a future date.

These agreements are effective for a specific term agreed upon by the parties with an option to renew, or, in some cases, are in effect for the duration of USL’s existence.

These agreements are effective for a specific term agreed upon by the parties with an option to renew, or, in some cases, are in effect for the duration of USLs existence.

Either party may terminate these agreements earlier for certain reasons described in the agreements.

As of September 30, 2025, USL’s portfolio held 665 Crude Oil Futures CL Contracts traded on the NYMEX.

As of September 30, 2025, USL did not hold any Futures Contracts traded on the ICE Futures.

As of March 31, 2026, USL’s portfolio held 758 Crude Oil Futures CL Contracts traded on the NYMEX.

As of March 31, 2026, USL did not hold any Futures Contracts traded on the ICE Futures.

For a list of USL’s current holdings, please see USL’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-Q

Item 2. Management’s Discussion and Analysis