What changed in this filing

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Item 1. Business

2022-02-25 compared with 2021-02-26 · 74 added, 92 removed, 939 unchanged (15% of the section changed)

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Specifically, USO seeks to achieve its investment objective by investing so that the average daily percentage change in USO’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 Oil Futures Contract over the same period.

As described in “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this annual report on Form 10-K, USO is currently unable to pursue its investment objective as favorably as it has in the past due to its inability to invest in the Benchmark Oil Futures Contract and certain other Oil Futures Contracts, as defined below, to the extent it was able to before the market conditions, regulatory limitations imposed on USO, and risk mitigation measures taken by USO’s FCMs.

As a result of the foregoing, there is still uncertainty as to whether USO will be able to achieve the same level of success as before in meeting its investment objective.

Investors should be aware that USO’s investment objective is not for its NAV or market price of shares to equal, in dollar terms, the spot price of light, sweet crude oil or any particular futures contract based on light, sweet crude oil, nor is USO’s investment objective for the percentage change in its NAV to reflect the percentage change of the price of any particular futures contract as measured over a time period greater than one day.

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Wainwright is a holding company that currently holds both USCF, as well as USCF Advisers LLC, an investment adviser registered under the Investment Advisers Act of 1940, as amended (“USCF Advisers”).

USCF Advisers serves as the investment adviser for the USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund (“SDCI”), a series of the USCF ETF Trust.

USCF Advisers serves as the investment adviser for the USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund (“SDCI”), USCF Midstream Energy Income Fund (“UMI”) and USCF Gold Strategy Plus Income Fund (“GLDX”), each a series of the USCF ETF Trust.

USCF Advisers was also the investment adviser for the USCF Commodity Strategy Fund (the “Mutual Fund”), a series of the USCF Mutual Funds Trust, until March 2019, when the Mutual Fund liquidated all of its assets and distributed cash pro rata to all remaining shareholders.

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USCF serves as the general partner of USO.

USCF also serves as the general partner of the United States Natural Gas Fund, LP (“UNG”), the United States 12 Month Oil Fund, LP (“USL”), the United States Gasoline Fund, LP (“UGA”), the United States 12 Month Natural Gas Fund, LP (“UNL”) and the United States Brent Oil Fund, LP (“BNO”), which listed their limited partnership shares on the American Stock Exchange (the "AMEX") under the ticker symbols “UNG” on April 18, 2007, “USL” on December 6, 2007 and “UGA” on February 26, 2008, respectively.

States Brent Oil Fund, LP (“BNO”), which listed their limited partnership shares on the American Stock Exchange (the “AMEX”) under the ticker symbols “UNG” on April 18, 2007, “USL” on December 6, 2007 and “UGA” on February 26, 2008, respectively.

As a result of the acquisition of the AMEX by NYSE Euronext, each of UNG’s, USL’s and UGA’s shares commenced trading on the NYSE Arca on November 25, 2008.

USCF is also the general partner of the United States 12 Month Natural Gas Fund, LP (“UNL”) and the United States Brent Oil Fund, LP (“BNO”), which listed their limited partnership shares on the NYSE Arca under the ticker symbols “UNL” on November 18, 2009 and “BNO” on June 2, 2010, respectively.

USCF is also the sponsor of the United States Commodity Index Fund (“USCI”), the United States Copper Index Fund (“CPER”) and the USCF Crescent Crypto Index Fund (“XBET”), each a series of the United States Commodity Index Funds Trust (“USCIFT”).

USCF is also the sponsor of the United States Commodity Index Fund (“USCI”) and the United States Copper Index Fund (“CPER”), each a series of the United States Commodity Index Funds Trust (“USCIFT”).

USCI and CPER listed their shares on the NYSE Arca under the ticker symbols “USCI” on August 10, 2010 and “CPER” on November 15, 2011, respectively.

A registration statement that had been previously filed for XBET was withdrawn on June 25, 2020.

USO, UNG, UGA, UNL, USL, BNO, USCI and CPER are referred to collectively herein as the “Related Public Funds.”

The Related Public Funds are subject to reporting requirements under the Securities Exchange Act of 1934, as amended (the "Exchange Act”).

UNG, UGA, UNL, USL, BNO, USCI and CPER are referred to collectively herein as the “Related Public Funds.”

The Related Public Funds are subject to reporting requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

For more information about each of the Related Public Funds, investors in USO may call 1-800-920-0259 or visit www.uscfinvestments.com or the website of the Securities and Exchange Commission (“SEC”) at www.sec.gov.

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USCF also pays the fees of ALPS Distributors, Inc.

(“ALPS Distributors”), which serves as the marketing agent for USO (the “Marketing Agent”), and The Bank of New York Mellon ("BNY Mellon"), which serves as the administrator (the “Administrator”) and the custodian (the “Custodian”), and provides accounting and transfer agent services for, USO since April 1, 2020.

(“ALPS Distributors”), which serves as the marketing agent for USO (the “Marketing Agent”), and The Bank of New York Mellon (“BNY Mellon”), which serves as the administrator (the “Administrator”) and the custodian (the “Custodian”), and provides accounting and transfer agent services for, USO since April 1, 2020.

Brown Brothers Harriman & Co.

("BBH&Co.") served as the administrator and custodian for USO prior to BNY Mellon.

(“BBH&Co.”) served as the administrator and custodian for USO prior to BNY Mellon.

Certain fund accounting and fund administration services rendered by BBH&Co.

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The daily holdings of USO are available on USO’s website at www.uscfinvestments.com.

Historically, USO has achieved its investment objective by primarily investing in the Benchmark Futures Contract and Oil Futures Contracts for light, sweet crude oil traded on NYMEX and ICE Futures with the same maturity month as the Benchmark Futures Contract.

Certain circumstances, including the market conditions, regulatory requirements, and risk mitigation measures imposed by its FCMs, could cause and have caused, as discussed below, USO to invest in Oil Futures Contracts other than the Benchmark Oil Futures Contract and may cause USO to invest in Other Oil-Related Investments.

Historically, USO has achieved its investment objective by primarily investing in the Benchmark Oil Futures Contract and Oil Futures Contracts for light, sweet crude oil traded on NYMEX and ICE Futures with the same maturity month as the Benchmark Oil Futures Contract.

While USO always has had the ability to invest in Oil Futures Contracts beyond the Benchmark Oil Futures Contract and in Other Oil- Related Investments, until recently USO’s need to exercise this ability to make such investments has been limited.

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While it is USO’s expectation that at some point in the future it will be able to return to primarily investing in the Benchmark Oil Futures Contract, there can be no guarantee of when, if ever, that will occur.

In addition, because of the limitations being imposed on USO by its regulators and its FCMs, USO may be limited in investing in other Oil Futures Contracts in addition to the Benchmark Oil Futures Contract.

These limitations would apply even if USO were to receive and accept request for Redemption Baskets lowering its current holdings in Oil Futures Contracts below the limits now being imposed on it.

In addition, because of the limitations being imposed on USO by its regulators and its FCMs, USO may be limited in investing in certain other Oil Futures Contracts in addition to the Benchmark Oil Futures Contract.

These limitations would apply even if USO were to receive and accept requests for Redemption Baskets lowering its current holdings in Oil Futures Contracts below the limits now being imposed on it.

The foregoing could limit the ability of USO (i) to reallocate its investments to more favorably meet its investment objective or (ii) in connection with the purchase of Creation Baskets, to invest the proceeds of such purchases in certain Oil Futures Contracts.

As a result, investors in USO should expect USO’s ability to invest in the Benchmark Oil Futures Contract and other Oil Futures Contracts to continue to be limited and USO may be required to invest in Other Oil-Related Interests.

As a result, there will be continued wider deviations between the performance of USO’s investments and the Benchmark Oil Futures Contract, and that changes in USO’s share price may not be able to track changes in the price of the Benchmark Oil Futures Contract at the same favorable levels as before the foregoing limitations or within the range of its investment objective.

As a result, there may be continued wider deviations between the performance of USO’s investments and the Benchmark Oil Futures Contract, and that changes in USO’s share price may not be able to track changes in the price of the Benchmark Oil Futures Contract at the same favorable levels as before the foregoing limitations or within the range of its investment objective.

The inability to closely track the Benchmark Oil Futures Contract and, as described below, the changes in its portfolio of investments and the impact of higher levels of contango, will impact the performance of USO and the value of its shares.

Monthly Roll.

Each month, within two weeks of expiration, USO changes the Benchmark Oil Futures Contract, which at the beginning of the month is the futures contract on light, sweet crude oil as traded on the NYMEX that is the near or front month (referred to herein as the first month) into the NYMEX futures contract that is the next month contract to expire (referred to herein as the second month).

Historically, this was done over a four-day period at the end of which the Benchmark Oil Futures Contract was the next month contracts to expire at that time and that contract remained the Benchmark Oil Futures Contract until the beginning of the following months change in the Benchmark Oil Futures Contract over a four-day period.

On each day during the four-day period, USCF “rolled” USO’s positions in Oil Interests by

closing, or selling, a percentage of USO’s positions in Oil Interests and reinvesting the proceeds from closing those positions in new Oil Interests that reflected the change in the Benchmark Oil Futures Contract.

Historically, this was done over a four-day period at the end of which the Benchmark Oil Futures Contract was the next month contract to expire at that time and that contract remained the Benchmark Oil Futures Contract until the beginning of the following month’s change in the Benchmark Oil Futures Contract over a four-day period.

On each day during the four-day period, USCF “rolled” USO’s positions in Oil Interests by closing, or selling, a percentage of USO’s positions in Oil Interests and reinvesting the proceeds from closing those positions in new Oil Interests that reflected the change in the Benchmark Oil Futures Contract.

In the past, during the four-day period, USO has rolled its positions in Oil Futures Contracts in the first month prior to the end of the month to avoid such contracts’ expiration and having to take delivery of the underlying commodity.

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USO extended the monthly roll/rebalancing period from a four-day period to a ten-day period due to the size and diversification of its portfolio holdings and to address regulatory concerns.

During the ten-day roll period, or a rebalance period, USO will close certain existing positions, e.g., when it changes the Benchmark Oil Futures Contract and sells contracts that will expire at the end of the month, or when it sells Oil Futures Contracts to address the market conditions, regulatory requirements and other factors discussed herein, and reinvests the proceeds in new Oil Futures Contracts or Other Oil-Related Investments in a manner that is consistent with its stated investment intentions concerning the type and percentages of the investments in its portfolio, including the waterfall permitted investments as described above.

The change from a four-day roll to a ten-day roll, whether or not USO holds any Benchmark Oil Futures Contacts at the time of the roll, does not change USO’s benchmark or its investment objective other than as described herein.

The Benchmark Oil Futures Contract remains the futures contract on light, sweet crude oil as traded on the NYMEX for the first month before the roll period, and during the roll period will proportionately change each day the Benchmark Oil Futures Contract to the futures contract on light, sweet crude oil as traded on the NYMEX for the second month, until the roll is completed.

Typically, on each day during the ten-day roll period, USO intends to rebalance approximately 1/10th of the announced percentage of the notional value of its nearest month instrument and other specified instruments (which could be 100% of such notional value of such interests) and reinvest the proceeds in the remaining current portfolio holdings as well as further-dated contracts and any new specified portfolio holdings in the waterfall of permitted investments described above.

In addition, USO may need to adjust the roll/rebalance in light of market conditions, regulatory requirements or other factors that impact the ability of USO to make its investments and achievement its investment objectives.

USO will roll its positions during the first 10 trading days of each subsequent month.

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USO’s assets used for margin and collateral are held in segregated accounts pursuant to the Commodity Exchange Act (the “CEA”) and CFTC regulations.

In addition to disclosing USO’s end of day portfolio of investments, USO discloses any changes to its investment intentions with respect to the type and percentage of investments in USO’s portfolio.

The parameters for making decisions regarding the permitted investments USO holds, including the intended order of priority or waterfall it considers in selecting investments and the type of investments to be held in its portfolio is set forth in the section “What is USO’s Investment Strategy?”.

In addition to disclosing USO’s end of day portfolio of investments, USO discloses any changes to its investment intentions on its website with respect to the type and percentage of investments in USO’s portfolio.

Such parameters and order of priority are discretionary to USO and, as described below, can be changed by USO due to regulatory requirements, risk mitigation measures, market conditions, liquidity requirements or other factors.

Further, the type and percentages of investments to be held by USO at the end of the monthly roll period as well as going forward, including for any rebalances, is published on its website www.uscfinvestments.com.

Accordingly, for the foreseeable future, to address and comply with the market conditions, regulatory requirements and other factors that have influenced, and will continue to influence, its investment decisions, USO intends to buy or sell its permitted investments when USO increases or decreases either its portfolio overall or its holdings of particular investments.

The investment intention announced by USO on its website as described above could change as a result of any or all of the following:

The investment intentions announced by USO on its website could change as a result of any or all of the following:

● evolving market conditions;

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USO’s ability to invest in the Benchmark Oil Futures Contract has been and continues to be limited by any of these occurrences.

In addition, while determining the appropriate investments for USO’s portfolio in accordance with its current intention, or to address the foregoing changes in market conditions, regulatory requirements or risk mitigation measures, USO may need to hold significant portions of its portfolio in cash beyond what it has historically held in order to satisfy potential margin requirements.

In addition, while determining the appropriate investments for USO’s portfolio in accordance with its current intention, or to address the foregoing changes in market conditions, regulatory requirements or risk mitigation measures, USO may need to hold significant portions of its portfolio in cash or cash equivalents beyond what it has historically held in order to satisfy potential margin requirements.

Creation and Redemption Baskets.

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

USCF further believes that the daily changes in USO’s NAV in percentage terms will closely track the daily changes in percentage terms in the Benchmark Oil Futures Contract, less USO’s expenses.

For performance data

relating to USO’s ability to track its benchmark, see “ Item 7.

USCF further believes that the daily changes in USO’s NAV in percentage terms will closely track the daily changes in percentage terms in the Benchmark Oil Futures Contract, plus interest earned on USO’s collateral holdings, less USO’s expenses.

For performance data relating to USO’s ability to track its benchmark, see “ Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations – Tracking USO’s Benchmark ” in this annual report on Form 10-K.

The specific Oil Futures Contracts purchased depend on various factors, including a judgment by USCF as to the appropriate diversification of USO’s investments in Futures Contracts with respect to the month of expiration, and the prevailing price volatility of particular contracts.

While USCF has made significant investments in NYMEX Oil Futures Contracts, for various reasons, including the ability to enter into the precise amount of exposure to the crude oil market, position limits or other regulatory requirements limiting USO’s holdings, and risk mitigation measures taken by its FCMs and other market conditions, it may invest in Oil Futures Contracts traded on other exchanges or invest in Other Oil-Related Investments.

While USCF has made significant investments in NYMEX Oil Futures Contracts, for various reasons, including the ability to enter into the precise amount of exposure to the crude oil market, position limits or other regulatory requirements limiting USO’s holdings, and risk mitigation measures taken by its FCMs and other market conditions, USO may invest in Oil Futures Contracts traded on other exchanges or invest in Other Oil-Related Investments.

To the extent that USO invests in Other Oil-Related Investments, it would prioritize investments in contracts and instruments that are economically equivalent to the Benchmark Oil Futures Contract, including cleared swaps that satisfy such criteria, and then, to a lesser extent, it would invest in other types of cleared swaps and other contracts, instruments and non-cleared swaps, such as swaps in the over-the-counter market (or commonly referred to as the “OTC market”).

If USO is required by law or regulation, or by one of its regulators, including a futures exchange, to reduce its position in the Benchmark Oil Futures Contracts to the applicable position limit or to a specified accountability level or if market conditions dictate it would be more appropriate to invest in Other Oil-Related Investments, a substantial portion of USO’s assets could be invested in accordance with such priority in Oil Futures Contracts other than the Benchmark Oil Futures Contract or oil futures contracts issued by NYMEX and ICE Futures with the same months and Other Oil-Related Investments that are intended to replicate the return on the Benchmark Oil Futures Contract.

If USO is required by law or regulation, or by one of its regulators, including a futures exchange, to reduce its position in the Benchmark Oil Futures Contract to the applicable position limit or to a specified accountability level or if market conditions dictate it would be more appropriate to invest in Other Oil-Related Investments, a substantial portion of USO’s assets could be invested in accordance with such priority in Oil Futures Contracts other than the Benchmark Oil Futures Contract or oil futures contracts issued by NYMEX and ICE Futures with the same months and Other Oil-Related Investments that are intended to replicate the return on the Benchmark Oil Futures Contract.

As USO’s assets reach higher levels, it is more likely to exceed position limits, accountability levels or other regulatory limits and, as a result, it is more likely that it will invest in accordance with such priority in Other Oil-Related Investments at such higher levels.

In addition, market conditions that USCF currently anticipates could cause USO to invest in Other Oil-Related Investments include those allowing USO to obtain greater liquidity or to execute transactions with more favorable pricing.

Business – Commodities Regulation” in this annual report on Form 10-K for a discussion of the potential impact of regulation on USO’s ability to invest in OTC transactions and cleared swaps.

As noted above, various factors including, but not limited to, evolving market conditions, changes to regulatory requirements imposed on USO with respect to its investment in the Benchmark Oil Futures Contract or other Oil Futures Contracts, and risk mitigation measures taken by market participants generally, including USO, have severely limited USO’s ability to invest in the Benchmark Oil Futures Contract and certain of the other investments in which USO traditionally would have invested in a substantial portion of its portfolio.

Moreover, because such factors have continued to evolve, USO has had to invest in other permitted investments instead of investing primarily in the Benchmark Oil Futures Contract and the cash-settled, but substantially similar, oil futures contract traded on ICE Futures (i.e., the ICE WTI Contract), but also has had to more frequently change the holdings in its portfolio than it has in the past.

The foregoing factors have changed USO’s portfolio holdings and have resulted in significant deviations from USO’s intended investment objective which is for the daily percentage changes in the NAV per share to reflect the daily percentage changes of the spot price of light, sweet crude oil, as measured by the daily percentage changes in the price of Benchmark Oil Futures Contract, plus interest earned on USO’s collateral holdings, less USO’s expenses.

Business – The Commodity Interest Markets - Commodities Regulation” in this annual report on Form 10-K for a discussion of the potential impact of regulation on USO’s ability to invest in OTC transactions and cleared swaps.

As noted above, in 2020, various factors including, but not limited to, evolving market conditions, changes to regulatory requirements imposed on USO with respect to its investment in the Benchmark Oil Futures Contract or other Oil Futures Contracts, and risk mitigation measures taken by market participants generally, including USO, severely limited USO’s ability to invest in the Benchmark Oil Futures Contract and certain of the other investments in which USO traditionally would have invested a substantial portion of its portfolio.

Moreover, because such factors have continued to evolve, together with the prospect that such factors could reoccur, USO has had to invest in other permitted investments instead of investing primarily in the Benchmark Oil Futures Contract and the cash-settled, but substantially similar, oil futures contract traded on ICE Futures (i.e., the ICE WTI Contract), but also has had to more frequently change the holdings in its portfolio than it has in the past.

The foregoing factors have changed USO’s portfolio holdings and have resulted in wider deviations between the performance of USO's investments and the Benchmark Oil Futures Contract than prior to the Spring of 2020.

However, these deviations are and were well within the plus or minus 10% range established as its benchmark tracking goal described above and, throughout 2021, were within plus or minus one percent.

Investment Parameters

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These parameters and order of priority are discretionary to USO and, as described below, can be changed by USO due to regulatory requirements, risk mitigation measures, market conditions, liquidity requirements or other factors.

The type and percentages of investments to be held by USO at the end of the monthly roll period as well as going forward, including for any rebalances, will be published on USO’s website www.uscfinvestments.com.

The type and percentages of investments to be held by USO at the end of the monthly roll period as well as for any rebalances are published on USO’s website at www.uscfinvestments.com.

Accordingly, for the foreseeable future, to address and comply with the market conditions, regulatory requirements and other factors that have influenced, and will continue to influence, its investment decisions, USO intends to buy or sell the following permitted investments taking into account the order, or waterfall, set forth below when USO increases or decreases either its portfolio overall or its holdings of particular investments:

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The first through the twelfth month WTI Oil Futures Contracts plus the second through thirteenth month Oil Futures Contracts based on Brent Crude Oil traded on ICE Futures (“Brent Oil Futures Contracts”);

The first through the twelfth month WTI Oil Futures Contracts Months plus the second through thirteenth month Brent Oil Futures Contracts plus the first through the twelfth month Oil Futures Contracts based on Ultra Low Sulfur Diesel Oil Futures Contract traded on NYMEX (“USDL Oil Futures Contract”);

The first through the twelfth month WTI Oil Futures Contracts plus the second through thirteenth month Brent Oil Futures Contracts plus the first through the twelfth month Oil Futures Contracts based on Ultra Low Sulfur Diesel Oil Futures Contract traded on NYMEX (“USDL Oil Futures Contract”);

The first through the twelfth month WTI Oil Futures Contracts plus the second through thirteenth month Brent Oil Futures Contracts plus the first through the twelfth month USDL Oil Futures Contracts plus the first through the twelfth month RBOB Gasoline Oil Futures Contracts (“Gasoline Futures Contract”);

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Other Oil-Related Investments, in addition to the foregoing investments.

USO will progress through the stages of the above-described waterfall of permitted investments as it approaches regulatory or other limits or as necessary to address market conditions, liquidity requirements or other factors, including additional investments in USO, requiring consideration of particular levels of the waterfall.

Generally, USO will invest in each stage of the waterfall in the order described above.

However, USO, in its sole discretion, may proceed to invest in a further stage of the waterfall (i.e., skipping over a particular stage) if it determines it may exceed position limits in the immediately following stage of the above waterfall within the next month or due to other regulatory requirements, risk mitigation measures, market conditions, liquidity requirements or other factors.

If, due to regulatory requirements, risk mitigation measures, market conditions, liquidity requirements or other factors, USO is not available to invest in a particular month contract described above, then it will adjust the methodology incrementally beginning from the nearest month contract available to it that it is reasonable or feasible to hold in light of such factors.

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Published portfolio changes will be implemented by USO over the course of the roll/rebalance period as indicated on the website or over the course of another day or period with respect to a particular change outside of the roll.

USO will progress through the stages of the above described waterfall of permitted investments as it approaches regulatory or other limits or as necessary to address market conditions, or other factors, including additional investments in USO, requiring consideration of particular levels of the waterfall.

Generally, USO will invest in each stage of the waterfall in the order described above.

The investment intention announced by USO could change as a result of any or all of the following:

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USCF may not be able to fully invest USO’s assets in Benchmark Oil Futures Contracts having an aggregate notional amount exactly equal to USO’s NAV.

For example, as standardized contracts, the Benchmark Oil Futures Contracts are for a specified amount of a particular commodity, and USO’s NAV and the proceeds from the sale of a Creation Basket are unlikely to be an exact

multiple of the amounts of those contracts.

As a result, in such circumstances, USO may be better able to achieve the exact amount of exposure to changes in price of the Benchmark Oil Futures Contract through the use of Other Oil-Related Investments, such as OTC contracts that have better correlation with changes in price of the Benchmark Oil Futures Contract.

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Once the daily price fluctuation limit has been reached in a particular futures contract, no trades may be made at a price beyond that limit.

The accountability levels for the Benchmark Oil Futures Contract and other Oil Futures Contracts traded on U.S.based futures exchanges, such as the NYMEX, are not a fixed ceiling, but rather a threshold above which the NYMEX may exercise greater scrutiny and control over an investor's positions.

The accountability levels for the Benchmark Oil Futures Contract and other Oil Futures Contracts traded on U.S.

based futures exchanges, such as the NYMEX, are not a fixed ceiling, but rather a threshold above which the NYMEX may exercise greater scrutiny and control over an investor’s positions.

The current accountability level for investments for any one month in the Benchmark Oil Futures Contract is 10,000 contracts.

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USO exceeded accountability levels of the NYMEX during the year ended December 31, 2021, including when it held a maximum of 73,956 Crude Oil Futures CL contracts, on the NYMEX, exceeding the “any” month limit.

Additionally, USO exceeded accountability levels imposed by the ICE Futures for the year ended December 31, 2020, including when it held a maximum of 58,488 Crude Oil Futures CL contracts, on the ICE, exceeding the "any"

Position limits differ from accountability levels in that they represent fixed limits on the maximum number of futures contracts that any person may hold and cannot allow such limits to be exceeded without express CFTC authority to do so.

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Commencing with the monthly roll that occurred in May 2020, USO’s positions in Oil Futures Contracts and Other Oil Related Investments roll over a ten-day period, whereas previously USO’s positions would roll over a four-day period.

As of May 1, 2020, the type and percentages of investments to be held by USO at the end of the monthly roll period as well as going forward, including for any rebalances, is published on its website www.uscfinvestments.com.

For the year ended December 31, 2020, USO did not exceed any position limits imposed by the NYMEX but did exceed position limits imposed by ICE Futures during the period of April 21 to April 23, 2020.

However, no action was taken by ICE Futures as a result.

As of May 1, 2020, the type and percentages of investments to be held by USO at the end of the monthly roll period as well as for any rebalances are published on its website www.uscfinvestments.com.

For the year ended December 31, 2021, USO did not exceed any position limits imposed by the NYMEX and ICE Futures.

The April 23 CME Letter, discussed above, ordered USCF, USO and the Related Public Funds not to assume a position in the light, sweet crude oil futures contract for June 2020 in excess of 15,000 long futures contracts, for July 2020 in 78,000 long futures contracts, for August 2020 in 50,000 long futures contracts, for September 2020 in 35,000 long futures contracts.

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

relevant accountability levels and position limits, and, additional or different risk mitigation measures taken by USO's FCM with respect to USO has invested and acquiring additional Oil Futures contracts, USO has invested and intends to invest in other permitted investments, beyond the Benchmark Oil Futures Contract.

Due to evolving market conditions, a change in regulator accountability levels and position limits imposed on USO with respect to its investment in Oil Futures Contracts as discussed in the CME Letters, remaining within relevant accountability levels and position limits, and, additional or different risk mitigation measures taken by USO’s FCM with respect to USO has invested and acquiring additional Oil Futures contracts, USO has invested and intends to invest in other permitted investments, beyond the Benchmark Oil Futures Contract.

On October 15, 2020, the CFTC approved a final rule that amends the existing federal position limits regime set forth in Part 150 of the CFTC’s regulations as well as the framework for exchange-set position limits and exemptions (such final rule, 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 Position Limits Rule sets position limits for the spot month and non-spot month;

however, the non-spot month limits only apply in respect of the agricultural futures contracts that are currently subject to position limits under Part 150 of the CFTC regulations (the “legacy agricultural contracts”).

With respect to regulatory oversight, the Position Limits Rule delegates authority to designated contract markets and swap execution facilities to oversee certain aspects of the position limits framework.

In addition to setting the federal position limits, the Position Limits Rule also provides several exemptions from such position limits, including an expanded list of enumerated bona fide hedge exemptions and certain spread exemptions.

Further, the Position Limits Rule sets forth two alternative processes for pursuing an exemption for non-enumerated hedge positions.

Other than for the legacy agricultural contracts, compliance with the limits imposed by the Position Limits Rule will not be required until 2022, except that economically equivalent swaps need not comply with the Position Limits Rule until 2023.The Benchmark Futures Contract will be subject to position limits under the Position Limits Rule, and USO’s trading does not qualify as an enumerated bona fide hedge.

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

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

Until such time as compliance with the Position Limits Rule is required, the regulatory architecture in effect prior to the adoption of the Position Limit Rules will govern transactions in commodities and related derivatives.

Under that system, the CFTC enforces federal limits on speculation in the nine legacy agricultural contracts, while futures exchanges establish and enforce position limits and accountability levels for other agricultural products and certain energy products (e.g., oil and natural gas).

Under existing CFTC regulations and the Position Limits Rule, for the purpose of position limits, a market participant is generally required, subject to certain narrow exceptions, to aggregate all positions for which that participant controls the trading decisions with all positions for which that participant has a 10 percent or greater ownership interest in an account or position, as well as the positions of two or more persons acting pursuant to an express or implied agreement or understanding with that market participant (the “Aggregation Rules”).

Price Volatility.

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Commodity pools’ trading positions in futures contracts or other related investments are typically required to be secured by the deposit of margin funds that represent only a small percentage of a futures contract’s (or other commodity interest’s) entire market value.

While USCF has not and does not intend to leverage USO’s assets, it is not prohibited from doing so under the LP Agreement.

Although permitted to do so under its Limited Partnership Agreement, USO has not and does not intend to leverage its assets and makes its investments accordingly.

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Custodian, Registrar, Transfer Agent, and Administrator

USCF engaged The Bank of New York Mellon ("BNY Mellon"), a New York corporation authorized to do a banking business (“BNY Mellon”), to provide USO and each of the Related Public Funds with certain custodial, administrative and accounting, and transfer agency services, pursuant to the following agreements with BNY Mellon dated as of March 20, 2020 (together, the “BNY Mellon Agreements”), which were effective as of April 1, 2020:

USCF engaged The Bank of New York Mellon (“BNY Mellon”), a New York corporation authorized to do a banking business (“BNY Mellon”), to provide USO and each of the Related Public Funds with certain custodial, administrative and accounting, and transfer agency services, pursuant to the following agreements with BNY Mellon dated as of March 20, 2020 (together, the “BNY Mellon Agreements”), which were effective as of April 1, 2020:

(i) a Custody Agreement;

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Brown Brothers Harriman and Co.

("BBH&Co.") previously served as the Administrator, Custodian, Transfer Agent and Fund Accounting Agent for USO and the Related Public Funds prior to BNY Mellon commencing such services on April 1, 2020.

(“BBH&Co.”) previously served as the Administrator, Custodian, Transfer Agent and Fund Accounting Agent for USO and the Related Public Funds prior to BNY Mellon commencing such services on April 1, 2020.

Certain fund accounting and fund administration services rendered by BBH&Co.

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Specifically, the Panel found that RBC Capital traders entered into EFRP trades in which RBC Capital accounts were on both sides of the transactions.

While the purpose of the transactions was to transfer positions between the RBC Capital accounts, the Panel found that the manner in which the trades occurred violated the Chicago Board of Trade’s prohibition on

The Panel found that RBC Capital thereby violated CBOT Rules 534 and (legacy) 538.B.

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RCG Division of Marex Spectron

On May 28, 2020, USO entered into a Commodity Futures Customer Agreement with RCG Division of Marex Spectron ("RCG") to serve as a FCM for USO.

On May 28, 2020, USO entered into a Commodity Futures Customer Agreement with RCG Division of Marex Spectron (“RCG”) to serve as a FCM for USO.

This agreement requires RCG to provide services to USO in connection with the purchase and sale of Oil Futures Contracts and other Oil-Related Investments which may be purchased or sold by or through RCG for USO’s account.

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On December 3, 2020, USO engaged Macquarie Futures USA LLC (“MFUSA”) to serve as an additional futures commission merchant for USO.

The Customer Agreement between USO and MFUSA requires MFUSA to provide services to USO in connection with the purchase and sale of futures contracts in Oil Futures Contracts and other Oil-Related Investments that may be purchased or sold by or through MFUSA for USO’s account.

through MFUSA for USO’s account.

Under this agreement, USO pays MFUSA commissions for executing and clearing trades on behalf of USO.

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Therefore, neither USCF nor USO believes that there will be any conflicts of interest with BTIG, LLC or its trading principals arising from its acting as USO’s introducing broker.

On November 30, 2021, USO entered into an ISDA 2002 Master Agreement (the “Macquarie ISDA”) with Macquarie Bank Limited, pursuant to which Macquarie Bank Limited has agreed to serve as an over-the-counter (“OTC”) swaps counterparty for USO.

The Macquarie ISDA provides USO the ability to invest in OTC swaps in furtherance of its investment objective by providing it with investment flexibility in light of market conditions, liquidity, regulatory requirements, and risk diversification.

USO may enter into OTC swap transactions with Macquarie under the Macquarie ISDA in light of the foregoing.

USO’s OTC swap transactions outstanding under the Macquarie ISDA, along with USO’s other holdings, will be published on USO’s webpage, www.uscfinvestments.com.

Macquarie Bank Limited’s principal address is Ropemaker Place, 28 Ropemaker Street, London, EC2Y 9HD, England.

Macquarie Bank Limited is registered with the CFTC as a swap dealer.

As of the date hereof, Macquarie Bank Limited has no material litigation to disclose as that term is defined under the CEA and regulations promulgated thereunder.

Macquarie Bank Limited is not affiliated with USO or USCF.

Therefore, neither USCF nor USO believes that there will be any conflicts of interest with Macquarie Bank Limited or its trading principals arising from Macquarie Bank Limited acting as an OTC swaps counterparty to USO.

Commodity Trading Advisor

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Thus, in a declining market, USO may have no gains to offset losses from other investments, and an investor may suffer losses on an investment in USO while incurring losses with respect to other asset classes.

● Historical performance of USO and the Benchmark Futures Contracts is not indicative of future performance.

● Historical performance of USO and the Benchmark Oil Futures Contracts is not indicative of future performance.

● The market price at which investors buy or sell shares may be significantly less or more than NAV.

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federal income tax, if the U.S.

Internal Revenue Service ("IRS") does not accept the assumptions and conventions applied by USO in allocating those items, with potential adverse consequences for an investor.

Internal Revenue Service (“IRS”) does not accept the assumptions and conventions applied by USO in allocating those items, with potential adverse consequences for an investor.

● USO could be treated as a corporation for federal income tax purposes, which may substantially reduce the value of the shares.

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RBC Capital Futures Commission Merchant

Approximately $3.50 per buy or sell, charges may vary

Approximately $3.50 per buy or sell;

charges may vary

RCG Division of Marex Spectron, Futures Commission Merchant

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(8) Includes expenses relating to the registration of additional shares, legal fees, auditing fees, printing expenses, licensing fees, tax reporting fees, prepaid insurance expenses and miscellaneous expenses and fees and expenses paid to the independent directors of USCF .

USO also pays the fees and expenses associated with its audit expenses, tax accounting and reporting requirements.

USO also pays the fees and expenses associated with its audit expenses, professional fees, and tax accounting and reporting requirements.

These fees were approximately $6,994,500 for the fiscal year ended December 31, 2021.

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If USO’s DTC account has not been credited with all of the baskets to be redeemed by such time, the redemption distribution will be delivered to the extent of whole baskets received.

Any remainder of the redemption distribution will be delivered on the next business day to the extent of remaining whole baskets received if USO receives the fee

applicable to the extension of the redemption distribution date which USCF may, from time to time, determine and the remaining baskets to be redeemed are credited to USO’s DTC account by 3:00 p.m.

Any remainder of the redemption distribution will be delivered on the next business day to the extent of remaining whole baskets received if USO receives the fee applicable to the extension of the redemption distribution date which USCF may, from time to time, determine and the remaining baskets to be redeemed are credited to USO’s DTC account by 3:00 p.m.

New York time on such next business day.

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An Authorized Participant is under no obligation to create or redeem baskets, and an Authorized Participant is under no obligation to offer to the public shares of any baskets it does create.

Authorized Participants that do offer to the public shares from the baskets they create will do so at per-share offering prices that are expected to reflect, among other factors, the trading price of the shares on the NYSE Arca, the NAV of USO at the time the Authorized Participant purchased the Creation Baskets and the NAV of the shares at the time of the offer of the shares to the public, the supply of

and demand for shares at the time of sale, and the liquidity of the Oil Futures Contract market and the market for Other Oil-Related Investments.

The prices of shares offered by Authorized Participants are expected to fall between USO’s NAV and the trading price of the shares on the NYSE Arca at the time of sale.

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If USO enters into a swap agreement, USO must post both collateral and independent amounts to its swap counterparties.

The amount of collateral USO posts changes according to the amounts owed by USO to its counterparty on a given swap transaction, while

independent amounts are fixed amounts posted by USO at the start of a swap transaction.

The amount of collateral USO posts changes according to the amounts owed by USO to its counterparty on a given swap transaction, while independent amounts are fixed amounts posted by USO at the start of a swap transaction.

Collateral and independent amounts posted to swap counterparties will be held by a third-party custodian.

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Futures Contracts and Position Limits

The CFTC is generally prohibited by statute from regulating trading on non-U.S.

futures exchanges and markets.

The CFTC, however, has adopted regulations relating to the marketing of non-U.S.

futures contracts in the United States.

These regulations permit certain contracts on non-U.S.

exchanges to be offered and sold in the United States.

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

The Position Limits Rule sets position limits for the spot month and non-spot month;

Further, the Position Limits Rule sets forth two alternative processes for pursuing an exemption for non-enumerated hedge positions.

The Benchmark Futures Contract will be subject to position limits under the Position Limits Rule, and USO’s trading does not qualify as an enumerated bona fide hedge.

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

Margin Requirements

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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.

The CFTC is generally prohibited by statute from regulating trading on non-U.S.

futures exchanges and markets.

The CFTC, however, has adopted regulations relating to the marketing of non-U.S.

futures contracts in the United States.

These regulations permit certain contracts on non-U.S.

exchanges to be offered and sold in the United States.

USO makes available, free of charge, on its website, its annual reports on Form 10-K, its quarterly reports on Form 10-Q, its current reports on Form 8-K and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after these forms are filed with, or furnished to, the SEC.

18 unchanged sentences

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 1. Business