United States 12 Month Oil Fund (USL) Fund Overview

United States 12 Month Oil Fund (USL) Financial Services Profile

The United States 12 Month Oil Fund (USL) is an exchange-traded security providing investors with direct, transparent exposure to West Texas Intermediate (WTI) crude oil price movements. Structured as a commodity pool, it tracks WTI through futures contracts, offering a specialized tool for portfolio diversification within the asset management sector.

What Is the Investment Thesis for USL?

The United States 12 Month Oil Fund (USL) offers investors a direct and liquid avenue to gain exposure to the daily price movements of West Texas Intermediate (WTI) crude oil, a critical global commodity. With a market capitalization of $0.05 billion, USL serves a niche within the asset management sector by providing a transparent, exchange-traded security for commodity participation. Its primary value driver is the direct correlation to WTI prices, making it a relevant tool for portfolio diversification or hedging against energy price inflation. The fund's beta of 1.38 indicates a higher sensitivity to overall market movements, suggesting potential for amplified returns during bullish market phases, albeit with increased risk during downturns. Key growth catalysts for USL are primarily external, driven by sustained investor interest in crude oil, geopolitical events impacting oil supply, and global economic growth forecasts that predict increased energy demand. As an ETF, its growth is measured by Assets Under Management (AUM), which can expand with inflows from investors seeking commodity exposure. However, an inherent risk factor is the fund's structure as a commodity pool, which can lead to tracking errors and potential losses, particularly in a contango market environment where the cost of rolling futures contracts negatively impacts returns. Investors must closely monitor WTI crude oil price trends and the fund's roll yield dynamics.

Based on FMP financials and quantitative analysis

USL Key Highlights

Market Capitalization: $0.05 billion, indicating a relatively small fund within the asset management landscape.

• Beta: 1.38, suggesting higher volatility and sensitivity to broader market movements compared to the overall market.
• Dividend Yield: None, as USL is structured as an exchange-traded security tracking commodity futures, not an equity paying dividends.
• Primary Holding: Near-month futures contracts on West Texas Intermediate (WTI) crude oil, providing direct commodity exposure.
• Trading Venue: Shares are listed and traded on the NYSE Arca, ensuring liquidity and accessibility for investors.

Who Are USL's Competitors?

USL is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are USL's Key Strengths?

Direct exposure to West Texas Intermediate (WTI) crude oil prices.

• High liquidity due to trading on NYSE Arca.
• Transparent pricing and operational structure as an exchange-traded security.
• Offers portfolio diversification benefits through commodity exposure.

What Are USL's Weaknesses?

Susceptibility to contango, leading to negative roll yield and potential tracking error.

• Performance is solely tied to WTI crude oil, lacking diversification within the fund itself.
• Small market capitalization of $0.05 billion, potentially limiting scale.
• Beta of 1.38 indicates higher volatility compared to the broader market.

What Are the Key Risks for USL?

Weak fundamentals — a Piotroski F-Score of 3/9 flags soft profitability, leverage or efficiency.

• Persistent contango in the WTI futures market, which can lead to negative roll yield and erode the fund's value over time, causing tracking error.
• A significant global economic downturn or recession, which could sharply reduce demand for crude oil and lead to sustained lower WTI prices.
• Increased adoption of renewable energy sources and electric vehicles, potentially leading to a long-term decline in fossil fuel demand.
• Regulatory changes impacting commodity pools or futures trading, which could alter USL's operational framework or increase compliance costs.
• High volatility of WTI crude oil prices, reflected in USL's beta of 1.38, exposing investors to significant price swings.

What Threats Does USL Face?

• Prolonged periods of contango negatively impacting returns and tracking accuracy.
• Declining global demand for crude oil due to energy transition or economic slowdowns.
• Increased competition from other commodity ETFs or direct futures market access.
• Regulatory changes impacting commodity pools or futures trading.

What Are USL's Competitive Advantages?

• Liquidity and Accessibility: As an exchange-traded security on NYSE Arca, USL offers high liquidity and ease of access for a broad range of investors.
• Direct Commodity Exposure: Provides a straightforward and regulated vehicle for direct exposure to WTI crude oil prices, simplifying commodity investing.
• Established Structure: Operates with a defined commodity pool structure, offering a known and understood mechanism for tracking futures.
• Brand Recognition: As part of the United States Commodity Funds (USCF) family, it benefits from an established brand in the commodity ETF space.

What Does USL Do?

The United States 12 Month Oil Fund, LP (USL) operates as an exchange-traded security, meticulously engineered to mirror the daily price fluctuations of West Texas Intermediate (WTI) light, sweet crude oil. Established to offer investors a direct and accessible conduit to the crude oil market, USL achieves its objective by primarily holding near-month futures contracts on WTI. This structure allows the fund to provide exposure to a crucial global commodity without requiring investors to engage directly in the complex futures market or physical oil ownership. Shares of USL are listed and actively traded on the NYSE Arca, providing liquidity and ease of transaction for institutional and retail investors alike. As a commodity pool, USL's operational framework involves rolling futures contracts, a process where expiring contracts are sold and new, longer-dated contracts are purchased. This mechanism is fundamental to maintaining continuous exposure to WTI crude oil prices over time. The fund's design aims for daily tracking, meaning its performance is intended to correlate with the daily percentage changes in WTI prices. However, the nature of futures markets, particularly phenomena like contango—where longer-dated futures contracts are more expensive than near-term ones—can introduce tracking errors and impact the fund's long-term performance due to negative roll yield. USL's existence addresses a specific market need for a regulated, transparent, and liquid investment vehicle that allows participation in the energy commodity sector, specifically crude oil, within a traditional brokerage account. Its headquarters are located in Walnut Creek, US, positioning it within the broader financial services industry focused on asset management. The fund represents a specialized offering for those seeking to incorporate commodity exposure into their investment strategies, providing a mechanism to potentially benefit from or hedge against movements in global oil prices.

What Products and Services Does USL Offer?

• Tracks the daily price movements of West Texas Intermediate (WTI) light, sweet crude oil.
• Issues shares that are traded on the NYSE Arca, providing liquidity for investors.
• Primarily holds near-month futures contracts on WTI crude oil to achieve its tracking objective.
• Operates as an exchange-traded security (ETS), offering direct commodity exposure.
• Provides a mechanism for investors to participate in the crude oil market without direct futures trading.
• Manages a commodity pool, involving the rolling of futures contracts to maintain continuous exposure.

How Does USL Make Money?

• Generates revenue through management fees charged on its Assets Under Management (AUM).
• Offers a liquid, exchange-traded product for investors seeking WTI crude oil exposure.
• Manages a portfolio of WTI crude oil futures contracts to achieve its investment objective.
• Provides transparency and accessibility for commodity investing through its listed shares.

What Industry Does USL Operate In?

The United States 12 Month Oil Fund (USL) operates within the dynamic Financial Services sector, specifically under the Asset Management industry. This segment is characterized by entities that manage investment portfolios and funds for clients, including exchange-traded funds (ETFs) like USL. The broader asset management industry is influenced by global economic conditions, interest rate policies, and investor sentiment towards various asset classes. USL's specific niche is commodity ETFs, providing exposure to crude oil. The competitive landscape for commodity ETFs includes other funds tracking WTI, Brent crude, or broader energy indices. Market trends indicate fluctuating investor demand for commodities, often driven by inflation concerns, geopolitical instability, and industrial demand. USL positions itself as a direct and liquid option for investors seeking to participate in the daily price movements of WTI crude oil, offering a specialized tool within a diverse and competitive asset management environment.

Who Are USL's Key Customers?

• Institutional investors seeking commodity exposure for diversification or hedging.
• Retail investors looking for a convenient way to invest in crude oil.
• Active traders aiming to capitalize on short-term WTI crude oil price movements.
• Portfolio managers seeking to allocate a portion of their assets to energy commodities.

United States 12 Month Oil Fund's Piotroski F-Score is 3/9, a 9-point checklist of profitability, leverage and efficiency — flagging fundamental weakness worth scrutiny.

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Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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