United States Oil Fund: United States Commodity Funds Llc

The following excerpt is from the company's SEC filing.
General
Partner of the United States Oil Fund, LP
March 25, 2021
Dear United States
Oil Fund, LP Investor,
Enclosed
with this letter is your copy of the 2020 financial statements for the United States Oil Fund, LP (ticker symbol “USO”).
We have mailed this statement to all investors in USO who held shares as of December 31, 2020 to satisfy our annual reporting
requirement under federal commodities laws. In addition, we have enclosed a copy of the current United States Commodity Funds
LLC (“USCF”) Privacy Policy applicable to USO. Additional information concerning USO’s 2020 results may be found
by referring to USO’s Annual Report on Form 10-K (the “Form 10-K”), which has been filed with the U.S. Securities
and Exchange Commission (the “SEC”). You may obtain a copy of the Form 10-K by going to the SEC’s website at

, or by going to USCF’s website at

www.uscfinvestments.com
. You may also call USCF at
1-800-920-0259
to speak to a representative and request
additional material, including a current USO Prospectus.
USCF
is the general partner of USO. USCF is also the general partner or sponsor and operator of several other commodity-based exchange-traded
funds. These other funds are referred to in the attached financial statements and include:
United
States Natural Gas Fund, LP
(ticker
symbol:
United
States Commodity Index Fund
United States 12
Month Oil Fund, LP
United States
Copper Index Fund
United States Gasoline
Fund, LP
United States 12
Month Natural Gas Fund, LP
United States Brent
Oil Fund, LP
Information
about these other funds is contained within the Form 10-K as well as in the current USO Prospectus. Investors in USO who wish
to receive additional information about these other funds may do so by going to the USCF website at
You
may also call USCF at
to request additional information.
Thank you for your continued interest in USO.
Regards,
/s/ John P.
Love
John P. Love
President and Chief Executive
Officer
United States Commodity
Funds LLC
*This
letter is not an offer to buy or sell securities. Investment in USO or any other funds should be made only after reading such
fund’s prospectus. Please consult the relevant prospectus for a description of the risks and expenses involved in any such
investment.
UNITED
STATES COMMODITY FUNDS LLC
PRIVACY POLICY
Effective
Date: January 1, 2020
Last
Updated: December 18, 2019
Introduction
This
document sets forth the Privacy Policy of (i) the United States Commodity Funds LLC (the “Company”), (ii) each of
the statutory trusts for which the Company serves as sponsor, the United States Commodity Index Funds Trust (the “Index
Funds Trust”) and the USCF Funds Trust (together with the Index Funds Trust, the “Trusts”), and (iii) each of
the funds for which the Company serves as the general partner or as sponsor as set forth in Appendix A, which may be amended from
time to time (each a “Fund” and together, the “Funds”), relating to the collection, maintenance and use
of nonpublic personal information about the Funds’ investors, as required under federal legislation. The Company is a commodity
pool operator registered with the Commodity Futures Trading Commission. This Privacy Policy covers the nonpublic personal information
of investors who are individuals and who obtain financial products or services primarily for personal, family or household purposes.
Collection of
Investor Information
In
the course of doing business with Fund shareholders, the Company and the Trusts may collect or have access to nonpublic personal
information about Fund shareholders. Shares of the Funds are registered in the name of Cede & Co., as nominee for the Depository
Trust Company. However, the Company may collect or have access to personal information about Fund investors for certain purposes
relating to the operation of the Funds, including for the distribution of certain required tax reports to investors. This information
may include information received from investors and information about investors’ holdings and transactions in shares of
the Funds.
“Nonpublic
personal information” is personally identifiable financial information about Fund shareholders. For example, it includes
Fund shareholders’ social security numbers, account balances, bank account information and investors’ holdings and
transactions in shares of the Funds.
The Company, the
Trusts and the Funds may collect this information from the following sources:
Information
about shareholder transactions with us and our service providers, or others;
Information
we receive from consumer reporting agencies (including credit bureaus);
Information
we may receive from shareholders.
Disclosure of Nonpublic
Personal Information
The
Company, the Trusts and the Funds do not sell or rent investor information of the Funds. The Company, the Trusts and the Funds
only disclose nonpublic personal information collected about Fund investors as permitted by law. For example, the Company, the
Trusts and the Funds may disclose nonpublic personal information about Fund investors:
To
companies that act as service providers in connection with the administration and servicing
of the Funds, which may include attorneys, accountants, auditors and other professionals;
maintain shareholder accounts, and in connection with the servicing or processing of
transactions of the Trusts or the Funds;
To
government entities, in response to subpoenas, court orders, judicial process or to comply
with laws or regulations;
To
protect against fraud, unauthorized transactions (such as money laundering), claims or
other liabilities, or to collect unpaid debts; and
When
shareholders direct us to do so or consent to the disclosure, including authorization
to disclose such information to persons acting in a fiduciary or representative capacity
on behalf of the investor.
Fund
investors have no right to opt out of the disclosure by the Company, the Trusts or the Funds of non-public personal information
under the circumstances described above.
Protection of Investor
Information
The
Company, the Trusts and the Funds holds Fund investor information in the strictest confidence. Accordingly, the Company’s
policy is to require that all employees, financial professionals and companies providing services on its behalf keep client information
confidential. In addition, access to nonpublic personal information about shareholders is limited to our employees and in some
cases to third parties (for example, the service providers described above) as permitted by law.
The
Company, the Trusts and the Funds maintains safeguards that comply with federal standards to protect investor information. The
Company restricts access to the personal and account information of investors to those employees who need to know that information
in the course of their job responsibilities. Third parties with whom the Company, the Trusts and the Funds share Fund investor
information must agree to follow appropriate standards of security and confidentiality, which includes safeguarding such information
physically, electronically and procedurally.
The
privacy policy of the Company, the Trusts and the Funds applies to both current and former Fund investors. The Company, the Trusts
and the Funds will only disclose nonpublic personal information about a former investor to the same extent as for a current Fund
investor.
Your California
Privacy Rights
If
you are a California resident, California law provides you with specific rights regarding your personal information, including
the right to request that we disclose certain information to you about the collection and use of your personal information over
the past 12 months; the right to request that we delete any of your personal information that we have collected from you, subject
to certain exceptions; and the right to opt-out of the “sale” of your personal information, as defined by California
law. To make such a request, contact us at 1-800-920-0259 or uscfinvestments.com. Please note that we are only required to respond
to two such requests per customer each year.
You also have the
right not to be discriminated against if you exercise any of your rights under California privacy law.
The Company may have
collected the following categories of personal information of California residents in the past 12 months:
Identifiers
such as a name, Internet Protocol address, email address, or other similar identifiers.
Categories
of personal information described in subdivision (e) of California Civil Code Section
1798.80.
Commercial
information, including records of sales or purchases.
Internet
or other electronic network activity information.
Geolocation
data.
Professional
or employment-related information.
Please
note that these rights do not apply to personal information collected, processed, sold, or disclosed pursuant to the federal Gramm-
Leach-Bliley Act and implementing regulations. Please review the privacy notices in the Appendix below for more information about
how we collect, process, sell, and disclose personal information pursuant to these laws and regulations.
This
information is collected and used for the purposes disclosed in this Privacy Policy. The Company has not sold personal information
of California residents in the past 12 months. The Company may have disclosed any of the above categories of personal information
pursuant to an individual’s consent or under a written contract with a service provider for a business purpose in the past
12 months.
Changes to Privacy
Policy
The
Company, the Trusts and the Funds may modify or amend this Privacy Policy from time to time. The Company will indicate the date
when it was most recently updated and its effective date. If there are changes to the privacy policy in the future, a revised
privacy policy with those changes will be communicated through an appropriate channel to Fund investors as long as they continue
to be Fund investors.
APPENDIX
A
UNITED
STATES COMMODITY FUNDS LLC,
GENERAL PARTNER OF
UNITED
STATES OIL FUND, LP
UNITED STATES NATURAL GAS FUND, LP
UNITED
STATES 12 MONTH OIL FUND, LP
UNITED
STATES GASOLINE FUND, LP
UNITED STATES 12 MONTH NATURAL GAS FUND, LP
UNITED
STATES BRENT OIL FUND, LP
SPONSOR
OF
UNITED
STATES COMMODITY INDEX FUND
UNITED STATES COPPER INDEX FUND
EACH A SERIES OF
UNITED
STATES COMMODITY INDEX FUNDS TRUST
USCF FUNDS TRUST
EACH
OF THE FUNDS FOR WHICH THE COMPANY SERVES AS
GENERAL PARTNER OR SPONSOR
Privacy
Notice
WHAT
DO UNITED STATES COMMODITY FUNDS LLC (THE “COMPANY”), THE UNITED STATES COMMODITY INDEX FUNDS TRUST AND THE USCF FUNDS
TRUST (EACH A “TRUST” AND TOGETHER, THE “TRUSTS”) AND EACH OF THE FUNDS FOR WHICH THE COMPANY SERVES
AS GENERAL PARTNER OR SPONSOR (EACH A “FUND” AND TOGETHER, THE “FUNDS”) DO WITH PERSONAL INFORMATION?
Financial
companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all
sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read
this notice carefully to understand what we do.
The types
of personal information we collect and share depend on the product or service you have with us. This information can include:
Social Security number
account transactions
transaction history
wire transfer instructions
checking account information
When you are

no longer
our customer, we continue to share your information as described in this notice.
All
financial companies need to share customers’ personal information to run their everyday business. In the section below,
we list the reasons financial companies can share their customers’ personal information; the reasons the Company and
the Trusts choose to share; and whether you can limit this sharing.
Reasons
we can share your personal information
Do
we share?
Can
you limit this sharing?
For our everyday
business purposes -
such as
to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to
credit bureaus
For our marketing
purposes -
to offer our products
and services to you
We
don’t share
For
joint marketing with other financial companies
For our affiliates’
everyday business purposes -
information about
your transactions and experiences
information about
your creditworthiness
For
our affiliates to market to you
For
non-affiliates to market to you
Questions? Call
1-510-522-9600 or go to
What
we do
How
do the Company, the Trusts and the Funds protect my personal information?
To
protect your personal information from unauthorized access and use, we use security measures that comply with federal law.
These measures include computer safeguards and secured files and buildings.
How
do the Company, the Trusts and the Funds collect my personal information?
We collect your
personal information, for example, when you
open an account
provide account information
give us your contact information
make a wire transfer
tell us where to send the money
We also collect
your information from others, such as credit bureaus, affiliates, or other companies.
Why
can’t I limit all sharing?
Federal law gives
you the right to limit only
sharing for affiliates’ everyday business purposes - information about your creditworthiness
affiliates from using your information to market to you
sharing for non-affiliates to market to you
State laws
and individual companies may give you additional rights to limit sharing.
Definitions
Affiliates
Companies
related by common ownership or control. They can be financial and non-financial companies.
Our affiliates include companies which are subsidiaries of Wainwright Holdings, Inc., such as USCF Advisers
LLC
Non-affiliates
Companies
not related by common ownership or control. They can be financial and non- financial companies.
The Company, the Trusts and the Funds do not share with non-affiliates so they can market to you
Joint
marketing
A formal
agreement between nonaffiliated financial companies that together market financial products or services to you.
The Company, the Trusts and the Funds do not conduct joint marketing.
UNITED
STATES OIL FUND, LP
FINANCIAL STATEMENTS
For
the years ended December 31, 2020, 2019 and 2018
AFFIRMATION
OF THE COMMODITY POOL OPERATOR
To
the Shareholders of the United States Oil Fund, LP:
Pursuant
to Rule 4.22(h) under the Commodity Exchange Act, the undersigned represents that, to the best of his knowledge and belief, the
information contained in this Annual Report for the years ended December 31, 2020, 2019 and 2018 is accurate and complete.
By
United States Commodity Funds LLC, as General Partner
/s/
John P. Love 
John P.
Love
President & Chief Executive
Officer of United States Commodity Funds LLC
On behalf of United States
Oil Fund, LP
Spicer
Jeffries LLp
Certified
Public Accountants
4601
DTC BOULEVARD • SUITE 700
DENVER,
COLORADO 80237
TELEPHONE:
(303) 753-1959
FAX:
(303) 753-0338
www.spicerjeffries.com
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Partners of
Opinions
on the Financial Statements and Internal Control over Financial Reporting
We
have audited the accompanying statements of financial condition of United States Oil Fund, LP (the “Fund”) as
of December 31, 2020 and 2019, including the schedule of investments as of December 31, 2020 and 2019, and the related statements
of operations, changes in partners’ capital and cash flows for each of the years in the three-year period ended December
31, 2020, and the related notes (collectively referred to as the “financial statements”). We also have audited the
Fund’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control
— Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of United
States Oil Fund, LP as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the
years in the three-year period ended December 31, 2020, in conformity with accounting principles generally accepted in the United
States of America. Also, in our opinion, the Fund maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2020 based on criteria established in Internal Control — Integrated Framework (2013) issued
by COSO.
Basis
for Opinion
The
Fund’s management is responsible for these financial statements, for maintaining effective internal control over financial
reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying
Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on
the Fund’s financial statements and an opinion on the Fund’s internal control over financial reporting based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)
and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error
or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our
audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining,
on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating
the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of
the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures
as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition
and Limitations of Internal Control over Financial Reporting
A
Fund’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A Fund’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the Fund; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of
the Fund are being made only in accordance with authorizations of management and directors of the Fund; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
Fund’s assets that could have a material effect on the financial statements.
Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical
Audit Matters
Critical
audit matters are matters arising from the current period audit of the financial statements that were communicated or required
to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements
and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit
matters.
We have served as the Fund’s auditor
since 2005.
Denver, Colorado
February 26, 2021
United States Oil Fund,
LP
Statements of Financial Condition
At December 31, 2020 and December 31, 2019
December 31,

 2020

 2019
Assets
Cash
and cash equivalents (at cost $2,585,466,700 and $1,026,973,397, respectively) (Notes 2 and 5)
Equity
in trading accounts:
Cash
and cash equivalents (at cost $723,771,439 and $149,272,014, respectively)
Unrealized
gain (loss) on open commodity futures contracts
401,443,958
37,520,567
Dividends
receivable
Interest
receivable
160,957
28,199
Prepaid
insurance*
38,452
39,269
Prepaid
registration fees
1,260,041
74,241
ETF
transaction fees receivable
Total
Assets
3,712,147,230
1,213,915,570
Liabilities
and Partners’ Capital
Payable
due to Broker
23,667,355
8,820,649
Payable
for shares redeemed
59,405,821
32,023,655
General
Partner management fees payable (Note 3)
1,407,565
467,894
Professional
fees payable
1,903,173
1,453,996
Brokerage
commissions payable
323,858
89,961
Directors’
fees payable*
52,049
43,388
License
fees payable
169,663
39,769
Total
Liabilities
86,929,484
42,939,312
Commitments
and Contingencies (Notes 3, 4 & 5)
Partners’
Capital
General
Partners
Limited
Partners
3,625,217,746
1,170,976,258
Total
Partners’ Capital
Total
Liabilities and Partners’ Capital
Limited
Partners’ shares outstanding
109,623,603
11,450,000
Net
asset value per share
102.27
Market
value per share
102.48
* Certain
prior year amounts have been reclassified for consistency with the current presentation.
†On April
28, 2020, there was a 1-for-8 reverse share split. The Statements of Financial Condition have been adjusted for the periods shown
to reflect the 1-for-8 reverse share split on a retroactive basis.
See accompanying notes to financial
statements.
United States Oil Fund, LP
Schedule of Investments
At December 31, 2020
Notional 

Amount
Number of

Contracts

Value/Unrealized
Gain (Loss) on
% of Partners’
Open
Commodity Futures Contracts - Long
United
States Contracts
NYMEX
WTI Crude Oil Futures February 2021 contracts, expiring January 2021
632,796,307
14,943
92,238,053
NYMEX
WTI Crude Oil Futures March 2021 contracts, expiring February 2021
645,421,542
14,909
79,603,128
NYMEX
WTI Crude Oil Futures April 2021 contracts, expiring March 2021
465,961,140
11,168
77,808,780
NYMEX
WTI Crude Oil Futures May 2021 contracts, expiring April 2021
504,602,270
39,167,650
NYMEX
WTI Crude Oil Futures June 2021 contracts, expiring May 2021
475,568,503
11,182
68,212,157
NYMEX
WTI Crude Oil Futures July 2021 contracts, expiring June 2021
172,979,880
8,242,320
NYMEX
WTI Crude Oil Futures December 2021 contracts, expiring November 2021
326,339,170
36,171,870
Total
Open Futures Contracts*
3,223,668,812
74,708
Shares/Principal
%
of Partners’
Market
Value
Cash
Equivalents
United
States Money Market Funds
Fidelity
Investments Money Market Funds - Government Portfolio, 0.01%#
10,002,000
RBC
U.S. Government Money Market Fund - Institutional Share Class, 0.02%#
408,532,000
Total
United States Money Market Funds
418,534,000
#    Reflects
the 7-day yield at December 31, 2020.
*    Collateral
amounted to $723,771,439 on open commodity futures contracts.
At December 31, 2019
Open
Futures Contracts - Long
NYMEX
WTI Crude Oil Futures CL February 2020 contracts, expiring January 2020*
1,133,488,110
19,178
Cash Equivalents
United States Treasury
Obligations
U.S. Treasury Bills:
2.05%, 1/02/2020
25,000,000
24,998,594
2.03%, 1/09/2020
50,000,000
49,977,667
2.01%, 1/16/2020
49,958,646
2.04%, 1/23/2020
49,938,369
2.02%, 1/30/2020
49,919,525
1.89%, 2/06/2020
49,906,251
1.87%, 2/13/2020
49,889,215
1.85%, 2/20/2020
49,872,569
1.85%, 2/27/2020
49,855,126
1.83%, 3/05/2020
100,000,000
99,677,067
1.84%, 3/19/2020
49,802,833
1.88%, 3/26/2020
49,780,417
1.70%, 4/02/2020
49,784,056
1.64%, 4/09/2020
49,775,875
1.60%, 4/16/2020
49,765,917
1.60%, 4/23/2020
49,750,458
1.59%, 4/30/2020
49,737,500
1.54%, 5/07/2020
45,000,000
44,757,906
1.55%, 5/14/2020
30,000,000
29,828,033
1.55%, 5/21/2020
29,819,638
1.58%, 5/28/2020
29,806,367
1.53%, 6/04/2020
40,000,000
39,738,222
1.53%, 6/11/2020
29,794,463
1.54%, 6/18/2020
39,712,700
1.57%, 6/25/2020
39,694,933
Total
Treasury Obligations
1,155,542,347
United States -
Money Market Funds
Fidelity Investments
Money Market Funds - Government Portfolio
20,000,000
Total
Cash Equivalents
1,175,542,347
100.39
Collateral
amounted to $149,272,014 on open futures contracts.
Statements of Operations
For the years ended December 31, 2020, 2019 and 2018
Year
ended

2018
Income
Gain
(loss) on trading of commodity futures contracts:
Realized
gain (loss) on closed commodity futures contracts
(2,251,576,260
220,179,889
1,603,334
Change
in unrealized gain (loss) on open commodity futures contracts
363,923,391
231,913,525
(312,173,308
Realized
gain (loss) on short-term investments
11,258
(3,070
Dividend
income
1,949,571
2,957,196
2,213,034
Interest
income*
8,528,581
29,461,116
29,889,589
289,546
312,000
358,000
Total
Income (Loss)
(1,876,885,171
484,834,984
(278,112,421
Expenses
General
Partner management fees (Note 3)
15,388,313
6,461,273
8,147,165
2,694,975
1,440,997
1,539,401
6,104,865
2,423,017
2,538,611
Directors’
fees and insurance
391,372
333,741
316,185
512,944
215,376
271,572
Registration
fees
3,203,939
504,876
349,290
Total
Expenses
28,296,408
11,379,280
13,162,224
Net
Income (Loss)
(1,905,181,579
473,455,704
(291,274,645
Net
Income (Loss) per limited partner share
(69.20
(19.95
Net
Income (Loss) per weighted average limited partner share
(16.61
(17.01
Weighted
average limited partner shares outstanding
114,667,411
15,155,959
17,125,822
Interest
income does not exceed paid in kind of 5%.
On
April 28, 2020, there was a 1-for-8 reverse share split. The Statements of Operations have been adjusted for the periods shown
to reflect the 1-for-8 reverse share split on a retroactive basis.
Statement of Changes in Partners’
Capital
Limited Partners*
2019†
2018†
Balances
at beginning of year
1,468,461,712
2,019,531,410
Addition
of 207,062,500, 34,137,500 and 38,437,500 partnership shares, respectively
8,030,979,653
3,196,742,422
3,972,118,855
Redemption
of (108,888,897), (41,837,500) and (40,187,500) partnership shares, respectively
(3,671,556,586
(3,967,683,580
(4,231,913,908
Net
income (loss)
Balances
at end of year
*General
Partners’ shares outstanding and capital for the periods presented were zero.
†On April
28, 2020, there was a 1-for-8 reverse share split. The Statement of Changes in Partners’ Capital has been adjusted for the periods
shown to reflect the 1-for-8 reverse share split on a retroactive basis.
Statements of Cash Flows
December 31, 
Cash
Flows from Operating Activities:
Adjustments
to reconcile net income (loss) to net cash provided by (used in) operating activities:
Change
in unrealized (gain) loss on open commodity futures contracts
(363,923,391
(231,913,525
(Increase)
decrease in dividends receivable
138,151
10,305
(Increase)
decrease in interest receivable
(132,758
(Increase)
decrease in prepaid insurance*
(7,571
(5,114
(Increase)
decrease in prepaid registration fees
(1,185,800
Increase
(decrease) in payable due to Broker
14,846,706
(57,283,329
Increase
(decrease) in General Partner management fees payable
939,671
(116,084
(215,644
Increase
(decrease) in professional fees payable
449,177
(287,285
(317,442
Increase
(decrease) in brokerage commissions payable
233,897
(98,000
Increase
(decrease) in directors’ fees payable*
(5,425
Increase
(decrease) in license fees payable
129,894
(13,869
(21,487
Net
cash provided by (used in) operating activities
(2,253,812,505
250,582,318
(36,685,031
Cash
Flows from Financing Activities:
Addition
of partnership shares
3,218,764,872
3,988,747,637
Redemption
of partnership shares
(3,644,174,420
(3,950,037,755
(4,286,383,585
Net
cash provided by (used in) financing activities
4,386,805,233
(731,272,883
(297,635,948
Net
Increase (Decrease) in Cash and Cash Equivalents
2,132,992,728
(480,690,565
(334,320,979
Total
Cash, Cash Equivalents and Equity in Trading Accounts, beginning of year
1,176,245,411
1,656,935,976
1,991,256,955
Total
Cash, Cash Equivalents and Equity in Trading Accounts, end of year
3,309,238,139
Components
of Cash and Cash Equivalents:
1,223,159,803
Equity
in Trading Accounts:
433,776,173
*Certain prior
year amounts have been reclassified for consistency with the current presentation.
Notes to Financial
Statements
NOTE 1 —
ORGANIZATION AND BUSINESS
The United
States Oil Fund, LP (“USO”) was organized as a limited partnership under the laws of the state of Delaware on May
12, 2005. USO is a commodity pool that issues limited partnership interests (“shares”) that may be purchased and sold
on the NYSE Arca, Inc. (the “NYSE Arca”). Prior to November 25, 2008, USO’s shares traded on the American Stock
Exchange (the “AMEX”). USO will continue in perpetuity, unless terminated sooner upon the occurrence of one or more
events as described in its Seventh Amended and Restated Agreement of Limited Partnership dated as of December 15, 2017 (the “LP
Agreement”), which grants full management control to its general partner, United States Commodity Funds LLC (“USCF”).
The investment
objective of USO is for the daily changes in percentage terms of its shares’ per share net asset value (“NAV”)
to reflect the daily changes in percentage terms of the spot price of light, sweet crude oil delivered to Cushing, Oklahoma, as
measured by the daily changes in the price of the Benchmark Oil Futures Contract, plus interest earned on USO’s collateral
holdings, less USO’s expenses. The Benchmark Oil Futures Contract is the futures contract for light, sweet crude oil as
traded on the New York Mercantile Exchange (the “NYMEX”) that is the near month contract to expire, except when the
near month contract is within two weeks of expiration, in which case it will be measured by the futures contract that is the next
month contract to expire. 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 described herein arose. 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. This is because natural market forces called contango and backwardation
have impacted the total return on an investment in USO’s shares during the past year relative to a hypothetical direct investment
in crude oil and, in the future, it is likely that the relationship between the market price of USO’s shares and changes
in the spot prices of light, sweet crude oil will continue to be so impacted by contango and backwardation. While USO’s
shares may be impacted by contango and backwardation, the potential costs associated with physically owning and storing crude
oil, could be substantial.
USCF
believes that it is not practical to manage the portfolio to achieve the foregoing investment objective when investing in Oil
Futures Contracts (as defined below) and Other Oil-Related Investments (as defined below). USO accomplishes its objective through
investments in futures contracts for light, sweet crude oil and other types of crude oil, diesel-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 other oil-related investments such as cash-settled options on Oil Futures Contracts,
forward contracts for oil, cleared swap contracts and over-the-counter (“OTC”) transactions that are based on the
price of crude oil, diesel-heating oil, gasoline, natural gas and other petroleum-based fuels, Oil Futures Contracts and indices
based on the foregoing (collectively, “Other Oil-Related Investments”). As of December 31, 2020, USO held 74,708 Oil
Futures Contracts for light, sweet crude oil traded on the NYMEX and did not hold any and did not hold any Oil Futures Contracts
for light, sweet crude oil traded on the ICE Futures Europe.
USO commenced
investment operations on April 10, 2006 and has a fiscal year ending on December 31. USCF is a member of the National Futures
Association (the “NFA”) and became registered as a commodity pool operator with the Commodity Futures Trading Commission
(the “CFTC”) effective December 1, 2005 and a swaps firm on August 8, 2013.
USCF is also
the general partner of the United States Natural Gas Fund, LP (“UNG”), the United States 12 Month Oil Fund, LP (“USL”)
and the United States Gasoline Fund, LP (“UGA”), which listed their limited partnership shares on 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”).
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.”
USO issues
shares to certain authorized purchasers (“Authorized Participants”) by offering baskets consisting of 100,000 shares
(“Creation Baskets”) through ALPS Distributors, Inc., as the marketing agent (the “Marketing Agent”).
The purchase price for a Creation Basket is based upon the NAV of a share calculated shortly after the close of the core trading
session on the NYSE Arca on the day the order to create the basket is properly received.
Authorized
Participants pay USO a transaction fee of $1,000 for each order placed to create one or more Creation Baskets or to redeem one
or more baskets (“Redemption Baskets”), consisting of 100,000 shares. Shares may be purchased or sold on a nationally
recognized securities exchange in smaller increments than a Creation Basket or Redemption Basket. Shares purchased or sold on
a nationally recognized securities exchange are not purchased or sold at the per share NAV of USO but rather at market prices
quoted on such exchange.
On April
28, 2020, after the close of trading on the NYSE Arca, USO effected a 1-for-8 reverse share split and post-split shares of USO
began trading on April 29, 2020. As a result of the reverse share split, every eight pre-split shares of USO were automatically
exchanged for one post-split share. Immediately prior to the reverse split, there were 1,482,900,000 shares of USO issued and
outstanding, representing a per share NAV of $2.04. Immediately after the effect of the reverse share split, the number of issued
and outstanding shares of USO decreased to 185,362,500, not accounting for fractional shares, and the per share NAV increased
to $16.35. In connection with the reverse share split, the CUSIP number for USO’s shares changed to 91232N207. USO’s ticker symbol,
“USO,” remains the same. The accompanying financial statements have been adjusted to reflect the effect of the reverse
share split on a retroactive basis.
In April 2006,
USO initially registered 17,000,000 shares on Form S-1 with the U.S. Securities and Exchange Commission (the “SEC”).
On April 10, 2006, USO listed its shares on the AMEX under the ticker symbol “USO” and switched to trading on
the NYSE Arca under the same ticker symbol on November 25, 2008. On that day, USO established its initial per share NAV by
setting the price at $67.39 and issued 200,000 shares in exchange for $13,479,000. USO also commenced investment operations on
April 10, 2006, by purchasing Oil Futures Contracts traded on the NYMEX based on light, sweet crude oil. As of December 31,
2020, USO had registered a total of 5,627,000,000 shares.
NOTE 2 —
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial
statements have been prepared in conformity with U.S. GAAP as detailed in the Financial Accounting Standards Board’s (“FASB”)
Accounting Standards Codification. USO is an investment company and follows the accounting and reporting guidance in FASB
Topic 946.
Revenue Recognition
Commodity futures
contracts, forward contracts, physical commodities and related options are recorded on the trade date. All such transactions are
recorded on the identified cost basis and marked to market daily. Unrealized gains or losses on open contracts are reflected in
the statements of financial condition and represent the difference between the original contract amount and the market value
(as determined by exchange settlement prices for futures contracts and related options and cash dealer prices at a predetermined
time for forward contracts, physical commodities, and their related options) as of the last business day of the year or as
of the last date of the financial statements. Changes in the unrealized gains or losses between periods are reflected in the statements
of operations. USO earns income on funds held at the custodian or  futures commission merchants (“FCMs”)
at prevailing market rates earned on such investments.
Brokerage Commissions
Brokerage
commissions on all open commodity futures contracts are accrued on a full-turn basis.
Income Taxes
USO is not
subject to federal income taxes; each partner reports his/her allocable share of income, gain, loss deductions or credits
on his/her own income tax return.
In accordance
with U.S. GAAP, USO is required to determine whether a tax position is more likely than not to be sustained upon examination by
the applicable taxing authority, including resolution of any tax related appeals or litigation processes, based on the technical
merits of the position. USO files an income tax return in the U.S. federal jurisdiction and may file income tax returns in
various U.S. states. USO is not subject to income tax return examinations by major taxing authorities for years
before 2017. The tax benefit recognized is measured as the largest amount of benefit that has a greater than fifty percent
likelihood of being realized upon ultimate settlement. De-recognition of a tax benefit previously recognized results in USO
recording a tax liability that reduces net assets. However, USO’s conclusions regarding this policy may be subject to review
and adjustment at a later date based on factors including, but not limited to, on-going analysis of and changes to tax laws, regulations
and interpretations thereof. USO recognizes interest accrued related to unrecognized tax benefits and penalties related to
unrecognized tax benefits in income tax fees payable, if assessed. No interest expense or penalties have been recognized as of
and for the year ended December 31, 2020.
Creations and Redemptions
Authorized
Participants may purchase Creation Baskets or redeem Redemption Baskets only in blocks of 100,000 shares at a price
equal to the NAV of the shares calculated shortly after the close of the core trading session on the NYSE Arca on the day the
order is placed.
USO receives
or pays the proceeds from shares sold or redeemed within two business days after the trade date of the purchase or redemption.
The amounts due from Authorized Participants are reflected in USO’s statements of financial condition as receivable for
shares sold and amounts payable to Authorized Participants upon redemption are reflected as payable for shares redeemed.
Authorized
Participants pay USO a $1,000 transaction fee for each order placed to create one or more Creation Baskets or to redeem one or
more Redemption Baskets.
Partnership Capital
and Allocation of Partnership Income and Losses
Profit
or loss shall be allocated among the partners of USO in proportion to the number of shares each partner holds as of
the close of each month. USCF may revise, alter or otherwise modify this method of allocation as described in the LP
Agreement.
Calculation
of Per Share NAV
USO’s
per share NAV is calculated on each NYSE Arca trading day by taking the current market value of its total assets, subtracting
any liabilities and dividing that amount by the total number of shares outstanding. USO uses the closing price for the contracts
on the relevant exchange on that day to determine the value of contracts held on such exchange.
Net Income (Loss) Per Share
Net income (loss)
per share is the difference between the per share NAV at the beginning of each period and at the end of each period. The weighted
average number of shares outstanding was computed for purposes of disclosing net income (loss) per weighted average share. The
weighted average shares are equal to the number of shares outstanding at the end of the period, adjusted proportionately for shares
added and redeemed based on the amount of time the shares were outstanding during such period. There were no shares held
by USCF at December 31, 2020.
Offering Costs
Offering
costs incurred in connection with the registration of additional shares after the initial registration of shares are borne
by USO. These costs include registration fees paid to regulatory agencies and all legal, accounting, printing and other expenses
associated with such offerings. These costs are accounted for as a deferred charge and thereafter amortized to expense over
twelve months on a straight-line basis or a shorter period if warranted.
Cash
equivalents include money market funds and overnight deposits or time deposits with original maturity dates of six months
or less.
Reclassification
Certain
amounts in the accompanying financial statements were reclassified to conform to the current presentation.
Use of Estimates
The preparation
of financial statements in conformity with U.S. GAAP requires USCF to make estimates and assumptions that affect the reported
amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements,
and the reported amounts of the revenue and expenses during the reporting period. Actual results may differ from those estimates
and assumptions.
NOTE 3 —
FEES PAID BY THE FUND AND RELATED PARTY TRANSACTIONS
USCF Management Fee
Under
the LP Agreement, USCF is responsible for investing the assets of USO in accordance with the objectives and policies
of USO. In addition, USCF has arranged for one or more third parties to provide administrative, custody, accounting, transfer
agency and other necessary services to USO. For these services, USO is contractually obligated to pay USCF a fee, which
is paid monthly, equal to 0.45% per annum of average daily total net assets.
Ongoing Registration Fees
and Other Offering Expenses
USO pays
all costs and expenses associated with the ongoing registration of its shares subsequent to the initial offering. These costs
include registration or other fees paid to regulatory agencies in connection with the offer and sale of shares, and all legal,
accounting, printing and other expenses associated with such offer and sale. For the years ended December 31, 2020,
2019 and 2018, USO incurred $3,203,939, $504,876 and $349,290 respectively, in registration fees and other offering expenses.
Independent Directors’
and Officers’ Expenses
USO is
responsible for paying its portion of the directors’ and officers’ liability insurance for USO and the Related Public
Funds and the fees and expenses of the independent directors who also serve as audit committee members of USO and the Related
Public Funds. USO shares the fees and expenses on a pro rata basis with each Related Public Fund, as described above, based
on the relative assets of each Related Public Fund computed on a daily basis. These fees and expenses for the year ending
December 31, 2020 are estimated to be a total of $391,372 for USO and, in the aggregate for USO and the Related Public Funds,
$585,896. For the year ended December 31, 2019, these fees and expenses were $556,951 for USO and the Related Public
Funds. USO’s portion of such fees and expenses for the year ended December 31, 2019 was $333,741. For the year ended December
31, 2018, these fees and expenses were $521,689 for USO and the Related Public Funds. USO’s portion of such fees
and expenses for the year ended December 31, 2018 was $316,185.
Licensing Fees
As discussed
in Note 4 below, USO entered into a licensing agreement with the NYMEX on April 10, 2006, as amended on October 20,
2011. Pursuant to the agreement, USO and the Related Public Funds, other than BNO, USCI and CPER, pay a licensing fee that is
equal to 0.015% on all net assets. During the years ended December 31, 2020, 2019 and 2018, USO incurred $512,944, $215,376
and $271,572, respectively under this arrangement.
Investor Tax Reporting
Cost
The fees
and expenses associated with USO’s audit expenses and tax accounting and reporting requirements are paid by USO. These costs
are estimated to be $2,200,000 for the year ending December 31, 2020. Tax reporting costs fluctuate between years
due to the number of shareholders during any given year.
Other Expenses and Fees
In addition
to the fees described above, USO pays all brokerage fees and other expenses in connection with the operation of USO, excluding
costs and expenses paid by USCF as outlined in Note 4 – Contracts and Agreements below.
NOTE 4 —
CONTRACTS AND AGREEMENTS
Marketing Agent Agreement
USO is
party to a marketing agent agreement, dated as of March 13, 2006, as amended from time to time, with the Marketing Agent
and USCF, whereby the Marketing Agent provides certain marketing services for USO as outlined in the agreement. The fees of the
Marketing Agent, which are borne by USCF, include a marketing fee of $425,000 per annum plus the following incentive fee: 0.00%
on USO’s assets from $0 – $500 million; 0.04% on USO’s assets from $500 million – $4 billion
and 0.03% on USO’s assets in excess of $4 billion. In no event may the aggregate compensation paid to the Marketing Agent
and any affiliate of USCF for distribution-related services exceed 10% of the gross proceeds of USO’s offering.
The above
fee does not include website construction and development, which are also borne by USCF.
Custody, Transfer Agency
and Fund Administration and Accounting Services Agreements
USCF
engaged The Bank of New York 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; (ii) a Fund Administration and Accounting Agreement; and (iii)
a Transfer Agency and Service Agreement. USCF pays the fees of BNY Mellon for its services under the BNY Mellon Agreements and
such fees are determined by the parties from time to time.
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. Certain fund accounting
and fund administration services rendered by BBH&Co. to USO and the Related Public Funds terminated on May 31, 2020 to allow
for the transition to BNY Mellon.
Brokerage and Futures Commission
Merchant Agreements
USO entered
into a brokerage agreement with RBC Capital Markets LLC (“RBC”) to serve as USO’s FCM effective October 10, 2013.
 USO has engaged each of RCG Division of Marex Spectron (“RCG”), E D & F Man Capital Markets Inc. (“MCM”)
and Macquarie Futures USA LLC (“MFUSA”) to serve as an additional FCM to USO effective on May 28, 2020, June 5, 2020,
and December 3, 2020, respectively. The agreements with USO’s FCMs require the FCMs to provide services to USO in connection with
the purchase and sale of Oil Futures Contracts and Other Oil-Related Investments that may be purchased and sold by or through the
applicable FCM for USO’s account. In accordance with the FCM agreements, USO pays each FCM commissions of approximately
$7 to $8 per round-turn trade, including applicable exchange, clearing and NFA fees for Oil Futures Contracts and options
on Oil Futures Contracts. Such fees include those incurred when purchasing Oil Futures Contracts and options on Oil
Futures Contracts when USO issues shares as a result of a Creation Basket, as well as fees incurred when selling Oil Futures
Contracts and options on Oil Futures Contracts when USO redeems shares as a result of a Redemption Basket. Such fees are
also incurred when Oil Futures Contracts and options on Oil Futures Contracts are purchased or redeemed for the purpose
of rebalancing the portfolio. USO also incurs commissions to brokers for the purchase and sale of Oil Futures Contracts, Other
Oil-Related Investments or short-term obligations of the United States of two years or less (“Treasuries”).

2020

2019
Total
commissions accrued to brokers
Total
commissions as annualized percentage of average total net assets
Commissions
accrued as a result of rebalancing
5,072,915
2,052,263
2,145,268
Percentage
of commissions accrued as a result of rebalancing
Commissions
accrued as a result of creation and redemption activity
1,031,950
370,754
393,343
Percentage
of commissions accrued as a result of creation and redemption activity
The increase
in total commissions accrued to brokers for the year ended December 31, 2020, compared to the year ended December 31,
2019, was due primarily to a higher number of crude oil futures contracts being held and traded.
NYMEX
Licensing Agreement
USO and the
NYMEX entered into a licensing agreement on April 10, 2006, as amended on October 20, 2011, whereby USO was granted a non-exclusive
license to use certain of the NYMEX’s settlement prices and service marks. Under the licensing agreement, USO and the Related
Public Funds, other than BNO, USCI and CPER, USOU and USOD, pay the NYMEX an asset-based fee for the license, the terms of which
are described in Note 3. USO expressly disclaims any association with the NYMEX or endorsement of USO by the NYMEX and acknowledges
that “NYMEX” and “New York Mercantile Exchange” are registered trademarks of the NYMEX.
NOTE 5 —
FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES
USO may
engage in the trading of futures contracts, options on futures contracts, cleared swaps and OTC swaps (collectively, “derivatives”).
USO is exposed to both market risk, which is the risk arising from changes in the market value of the contracts, and credit risk,
which is the risk of failure by another party to perform according to the terms of a contract.
USO may
enter into futures contracts, options on futures contracts, cleared swaps, and OTC-swaps to gain exposure to changes in the value
of an underlying commodity. A futures contract obligates the seller to deliver (and the purchaser to accept) the future delivery
of a specified quantity and type of a commodity at a specified time and place. Some futures contracts may call for physical delivery
of the asset, while others are settled in cash. The contractual obligations of a buyer or seller may generally be satisfied by
taking or making physical delivery of the underlying commodity or by making an offsetting sale or purchase of an identical futures
contract on the same or linked exchange before the designated date of delivery. Cleared swaps are agreements that are eligible
to be cleared by a clearinghouse, e.g., ICE Clear Europe, and provide the efficiencies and benefits that centralized clearing
on an exchange offers to traders of futures contracts, including credit risk intermediation and the ability to offset positions
initiated with different counterparties. OTC swaps are entered into between two parties in private contracts. In an OTC swap,
each party bears credit risk to the other party, i.e., the risk that the other party may not be able to perform its obligations
under the OTC swap.
The purchase
and sale of futures contracts, options on futures contracts and cleared swaps require margin deposits with an FCM. Additional
deposits may be necessary for any loss on contract value. The Commodity Exchange Act requires FCMs to segregate all customer transactions
and assets from the FCM’s proprietary activities. To reduce the credit risk that arises in connection with OTC swaps, USO
will generally enter into an agreement with each counterparty based on the Master Agreement published by the International Swaps
and Derivatives Association, Inc., which provides for the netting of its overall exposure to its counterparty. The Master Agreement
is negotiated as between the parties and would address, among other things, the exchange of margin between the parties.
Futures
contracts, options on futures contracts and cleared swaps involve, to varying degrees, elements of market risk (specifically commodity
price risk) and exposure to loss in excess of the amount of variation margin. The face or contract amounts reflect the extent
of the total exposure USO has in the particular classes of instruments. Additional risks associated with the use of futures
contracts are an imperfect correlation between movements in the price of the futures contracts and the market value of the underlying
securities and the possibility of an illiquid market for a futures contract. Buying and selling options on futures contracts exposes
investors to the risks of purchasing or selling futures contracts.
As to
OTC swaps, valuing OTC derivatives is less certain than valuing actively traded financial instruments such as exchange-traded
futures contracts and securities or cleared swaps, because the price and terms on which such OTC derivatives are entered into
or can be terminated are individually negotiated, and those prices and terms may not reflect the best price or terms available
from other sources. In addition, while market makers and dealers generally quote indicative prices or terms for entering into
or terminating OTC contracts, they typically are not contractually obligated to do so, particularly if they are not a party to
the transaction. As a result, it may be difficult to obtain an independent value for an outstanding OTC derivatives transaction.
A novel
strain of coronavirus (COVID-19) outbreak was declared a pandemic by the World Health Organization on March 11, 2020. The situation
is evolving with various cities and countries around the world responding in different ways to address the outbreak. There are
direct and indirect economic effects developing for various industries and individual companies throughout the world. Management
will continue to monitor the impact COVID-19 has on USO and reflect the consequences as appropriate in USO’s accounting and financial
reporting. The recent pandemic spread of the novel coronavirus and related geopolitical events could lead to increased market
volatility, disruption to U.S. and world economies and markets and may have significant adverse effects on USO and its investments.
All of
the futures contracts held by USO through December 31, 2020 were exchange-traded. The risks associated with exchange-traded
contracts are generally perceived to be less than those associated with OTC swaps since, in OTC swaps, a party must rely solely
on the credit of its respective individual counterparties. However, in the future, if USO were to enter into non-exchange traded
contracts, it would be subject to the credit risk associated with counterparty non-performance. The credit risk from counterparty
non-performance associated with such instruments is the net unrealized gain, if any, on the transaction. USO has credit risk under
its futures contracts since the sole counterparty to all domestic and foreign futures contracts is the clearinghouse for the exchange
on which the relevant contracts are traded. In addition, USO bears the risk of financial failure by the clearing broker.
USO’s cash
and other property, such as Treasuries, deposited with its FCMs are considered commingled with all other customer funds, subject
to such FCM’s segregation requirements. In the event of an FCM’s insolvency, recovery may be limited to a pro rata
share of segregated funds available. It is possible that the recovered amount could be less than the total of cash and other property
deposited. The insolvency of an FCM could result in the complete loss of USO’s assets posted with that FCM; however,
the majority of USO’s assets are held in investments in Treasuries, cash and/or cash equivalents with USO’s
custodian and would not be impacted by the insolvency of an FCM. The failure or insolvency of USO’s custodian, however,
could result in a substantial loss of USO’s assets.
USCF
invests a portion of USO’s cash in money market funds that seek to maintain a stable per share NAV. USO is exposed
to any risk of loss associated with an investment in such money market funds. As of December 31, 2020 and December 31,
2019, USO held investments in money market funds in the amounts of $418,534,000 and $20,000,000, respectively. USO also holds
cash deposits with its custodian. As of December 31, 2020 and December 31, 2019, USO held cash deposits and investments
in Treasuries in the amounts of $2,890,704,139 and $1,156,245,411 respectively, with the custodian and FCMs. Some or all of these
amounts may be subject to loss should USO’s custodian and/or FCMs cease operations.
For derivatives,
risks arise from changes in the market value of the contracts. Theoretically, USO is exposed to market risk equal to the value
of futures contracts purchased and unlimited liability on such contracts sold short or that the value of the futures contract
could fall below zero. As both a buyer and a seller of options, USO pays or receives a premium at the outset and then bears
the risk of unfavorable changes in the price of the contract underlying the option.
USO’s policy
is to continuously monitor its exposure to market and counterparty risk through the use of a variety of financial, position and
credit exposure reporting controls and procedures. In addition, USO has a policy of requiring review of the credit standing of
each broker or counterparty with which it conducts business.
The financial
instruments held by USO are reported in its statements of financial condition at market or fair value, or at carrying amounts
that approximate fair value, because of their highly liquid nature and short-term maturity.
SEC
and CFTC Wells Notices
On August
17, 2020, USCF, USO, and John Love received a “Wells Notice” from the staff of the SEC (the “SEC Wells Notice”).
The SEC Wells Notice relates to USO’s disclosures in late April and early May regarding constraints imposed on USO’s ability to
invest in Oil Futures Contracts. The SEC Wells Notice states that the SEC staff has made a preliminary determination to recommend
that the SEC file an enforcement action against USCF, USO, and Mr. Love alleging violations of Sections 17(a)(1) and 17(a)(3)
of the 1933 Act and Section 10(b) of the 1934 Act and Rule 10b-5 thereunder, in each case with respect to its disclosures and
USO’s actions.
On August
19, 2020, USCF, USO, and Mr. Love received a Wells Notice from the staff of the CFTC (the “CFTC Wells Notice”). The
CFTC Wells Notice states that the CFTC staff has made a preliminary determination to recommend that the CFTC file an enforcement
action against USCF, USO, and Mr. Love alleging violations of Sections 4o(1)(A) and (B) and 6(c)(1) of the CEA, 7 U.S.C. §§
6o(1)(A), (B), 9(1) (2018), and CFTC Regulations 4.26, 4.41, and 180.1(a), 17 C.F.R. §§ 4.26, 4.41, 180.1(a) (2019),
in each case with respect to its disclosures and USO’s actions.
A Wells
Notice is neither a formal charge of wrongdoing nor a final determination that the recipient has violated any law. USCF, USO,
and Mr. Love maintain that USO’s disclosures and their actions were appropriate. They intend to vigorously contest the allegations
made by the SEC staff in the SEC Wells Notice and the CFTC staff in the CFTC Wells Notice.
In
re: United States Oil Fund, LP Securities Litigation
On June
19, 2020, USCF, USO, John P. Love, and Stuart P. Crumbaugh were named as defendants in a putative class action filed by purported
shareholder Robert Lucas (the “Lucas Class Action”).  The Court thereafter consolidated the Lucas Class Action
with two related putative class actions filed on July 31, 2020 and August 13, 2020, and appointed a lead plaintiff.  The
consolidated class action is pending in the U.S. District Court for the Southern District of New York under the caption In re:
United States Oil Fund, LP Securities Litigation, Civil Action No. 1:20-cv-04740.
On November
30, 2020, the lead plaintiff filed an amended complaint (the “Amended Lucas Class Complaint”). The Amended Lucas Class
Complaint asserts claims under the 1933 Act, the 1934 Act, and Rule 10b-5.  The Amended Lucas Class Complaint challenges
statements in registration statements that became effective on February 25, 2020 and March 23, 2020 as well as subsequent public
statements through April 2020 concerning certain extraordinary market conditions and the attendant risks that caused the demand
for oil to fall precipitously, including the COVID-19 global pandemic and the Saudi Arabia-Russia oil price war.  The Amended
Lucas Class Complaint purports to have been brought by an investor in USO on behalf of a class of similarly-situated shareholders
who purchased USO securities between February 25, 2020 and April 28, 2020 and pursuant to the challenged registration statements.
 The Amended Lucas Class Complaint seeks to certify a class and to award the class compensatory damages at an amount to be
determined at trial as well as costs and attorney’s fees.  The Amended Lucas Class Complaint named as defendants USCF,
USO, John P. Love, Stuart P. Crumbaugh, Nicholas D. Gerber, Andrew F. Ngim, Robert L. Nguyen, Peter M. Robinson, Gordon L. Ellis,
and Malcolm R. Fobes III, as well as the marketing agent, ALPS Distributors, Inc., and the Authorized Participants: ABN Amro,
BNP Paribas Securities Corporation, Citadel Securities LLC, Citigroup Global Markets, Inc., Credit Suisse Securities USA LLC,
Deutsche Bank Securities Inc., Goldman Sachs & Company, J.P. Morgan Securities Inc., Merrill Lynch Professional Clearing Corporation,
Morgan Stanley & Company Inc., Nomura Securities International Inc., RBC Capital Markets LLC, SG Americas Securities LLC,
UBS Securities LLC, and Virtu Financial BD LLC.  
The lead
plaintiff has filed a notice of voluntary dismissal of its claims against BNP Paribas Securities Corporation, Citadel Securities
LLC, Citigroup Global Markets Inc., Credit Suisse Securities USA LLC, Deutsche Bank Securities Inc., Morgan Stanley & Company,
Inc., Nomura Securities International, Inc., RBC Capital Markets, LLC, SG Americas Securities LLC, and UBS Securities LLC.  
USCF,
USO, and the individual defendants in In re: United States Oil Fund, LP Securities Litigation intend to vigorously contest such
claims and move for their dismissal.
Wang
Class Action
On July 10,
2020, purported shareholder Momo Wang filed a putative class action complaint, individually and on behalf of others similarly
situated, against defendants USO, USCF, John P. Love, Stuart P. Crumbaugh, Nicholas D. Gerber, Andrew F. Ngim, Robert L. Nguyen,
Peter M. Robinson, Gordon L. Ellis, Malcolm R. Fobes, III, ABN Amro, BNP Paribas Securities Corp., Citadel Securities LLC, Citigroup
Global Markets Inc., Credit Suisse Securities USA LLC, Deutsche Bank Securities Inc., Goldman Sachs & Company, JP Morgan Securities
Inc., Merrill Lynch Professional Clearing Corp., Morgan Stanley & Company Inc., Nomura Securities International Inc., RBC
Capital Markets LLC, SG Americas Securities LLC, UBS Securities LLC, and Virtu Financial BD LLC, in the U.S. District Court for
the Northern District of California as Civil Action No. 3:20-cv-4596 (the “Wang Class Action”).
The Wang
Class Action asserted federal securities claims under the 1933 Act, challenging disclosures in a March 19, 2020 registration statement.
It alleged that the defendants failed to disclose to investors in USO certain extraordinary market conditions and the attendant
risks that caused the demand for oil to fall precipitously, including the COVID-19 global pandemic and the Saudi Arabia-Russia
oil price war. The Wang Class Action was voluntarily dismissed on August 4, 2020.
Mehan
Action
On August
10, 2020, purported shareholder Darshan Mehan filed a derivative action on behalf of nominal defendant USO, against defendants
USCF, John P. Love, Stuart P. Crumbaugh, Nicholas D. Gerber, Andrew F Ngim, Robert L. Nguyen, Peter M. Robinson, Gordon L. Ellis,
and Malcolm R. Fobes, III (the “Mehan Action”). The action is pending in the Superior Court of the State of California
for the County of Alameda as Case No. RG20070732.
The Mehan
Action alleges that the defendants breached their fiduciary duties to USO and failed to act in good faith in connection with a
March 19, 2020 registration statement and offering and disclosures regarding certain extraordinary market conditions that caused
demand for oil to fall precipitously, including the COVID-19 global pandemic and the Saudi Arabia-Russia oil price war. The complaint
seeks, on behalf of USO, compensatory damages, restitution, equitable relief, attorney’s fees, and costs. All proceedings
in the Mehan Action are stayed pending disposition of the motion(s) to dismiss in In re: United States Oil Fund, LP Securities
Litigation.
USCF,
USO, and the other defendants intend to vigorously contest such claims.
In
re United States Oil Fund, LP Derivative Litigation
On August
27, 2020, purported shareholders Michael Cantrell and AML Pharm. Inc. DBA Golden International filed two separate derivative actions
on behalf of nominal defendant USO, against defendants USCF, John P. Love, Stuart P. Crumbaugh, Andrew F. Ngim, Gordon L. Ellis,
Malcolm R. Fobes, III, Nicholas D. Gerber, Robert L. Nguyen, and Peter M. Robinson in the U.S. District Court for the Southern
District of New York at Civil Action No. 1:20-cv-06974 (the “Cantrell Action”) and Civil Action No. 1:20-cv-06981
(the “AML Action”), respectively.
The complaints
in the Cantrell and AML Actions are nearly identical. They each allege violations of Sections 10(b), 20(a) and 21D of the 1934
Act, Rule 10b-5 thereunder, and common law claims of breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement,
and waste of corporate assets. These allegations stem from USO’s disclosures and defendants’ alleged actions in light
of the extraordinary market conditions in 2020 that caused demand for oil to fall precipitously, including the COVID-19 global
pandemic and the Saudi Arabia-Russia oil price war. The complaints seek, on behalf of USO, compensatory damages, restitution,
equitable relief, attorney’s fees, and costs. The plaintiffs in the Cantrell and AML Actions have marked their actions as
related to the Lucas Class Action.
On September
9, 2020, the Court entered an order consolidating the Cantrell and AML Actions under the caption In re United States Oil Fund,
LP Derivative Litigation, Civil Action No. 1:20-cv-06974 and appointing co-lead counsel. All proceedings in In re United States
Oil Fund, LP Derivative Litigation are stayed pending disposition of the motion(s) to dismiss in In re: United States Oil Fund,
LP Securities Litigation.
USCF, USO, and
the other defendants intend to vigorously contest the claims in In re United States Oil Fund, LP Derivative Litigation.
NOTE 6 —
FINANCIAL HIGHLIGHTS
The following
table presents per share performance data and other supplemental financial data for the years ended December 31, 2020,
2019 and 2018 for the shareholders. This information has been derived from information presented in the financial statements.
Per Share Operating Performance:
Net asset
value, beginning of year
Total income (loss)
(68.95
(19.18
Total
expenses
Net
increase (decrease) in net asset value
Net
asset value, end of year
Total
Return
(67.66
(20.65
Ratios to Average
Net Assets
Total
income (loss)
(54.88
(15.36
Management
fees
Expenses
excluding management fees
(55.71
(16.09
*On April
28, 2020, there was a 1-for-8 reverse share split. The Financial Highlights have been adjusted for the periods shown to reflect
the 1-for-8 reverse share split on a retroactive basis.
Total returns
are calculated based on the change in value during the period. An individual shareholder’s total return and ratio may vary
from the above total returns and ratios based on the timing of contributions to and withdrawals from USO.
NOTE 7 - QUARTERLY
FINANCIAL DATA (Unaudited)
The following
summarized (unaudited) quarterly financial information presents the results of operations and other data for the three-month periods
ended March 31, June 30, September 30 and December 31, 2020 and 2019.
Second
Fourth
Quarter
Total Income
(Loss)
(1,614,034,624
(916,724,948
91,637,158
562,237,243
Total Expenses
3,338,866
10,338,213
7,746,606
6,872,723
(1,617,373,490
(927,063,161
83,890,552
555,364,520
Net Income (Loss) per Share
(68.33
424,069,433
(22,663,248
(80,441,230
163,870,029
3,171,765
2,930,288
2,777,247
2,499,980
420,897,668
(25,593,536
(83,218,477
161,370,049
Net Income (Loss) per Share*
*On April 28,
2020, there was a 1-for-8 reverse share split. The unaudited Quarterly Financial data has been adjusted for the period shown to
reflect the 1-for-8 reverse a share split on a retroactive basis.
NOTE 8 —
FAIR VALUE OF FINANCIAL INSTRUMENTS
USO values
its investments in accordance with Accounting Standards Codification 820 – Fair Value Measurements and Disclosures
(“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value in generally accepted accounting
principles, and expands disclosures about fair value measurement. The changes to past practice resulting from the application
of ASC 820 relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about
fair value measurement. ASC 820 establishes a fair value hierarchy that distinguishes between: (1) market participant assumptions
developed based on market data obtained from sources independent of USO (observable inputs) and (2) USO’s own
assumptions about market participant assumptions developed based on the best information available under the circumstances (unobservable
inputs). The three levels defined by the ASC 820 hierarchy are as follows:
Level
I – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has
the ability to access at the measurement date.
Level
II – Inputs other than quoted prices included within Level I that are observable for the asset or liability, either
directly or indirectly. Level II assets include the following: quoted prices for similar assets or liabilities in active markets,
quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that
are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data
by correlation or other means (market-corroborated inputs).
Level
III – Unobservable pricing input at the measurement date for the asset or liability. Unobservable inputs shall be used
to measure fair value to the extent that observable inputs are not available.
In some
instances, the inputs used to measure fair value might fall within different levels of the fair value hierarchy. The level in
the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest
input level that is significant to the fair value measurement in its entirety.
The following
table summarizes the valuation of USO’s securities at December 31, 2020 using the fair value hierarchy:
At
December 31, 2020
Level I
Level II
Level III
Short-Term Investments
Exchange-Traded Futures
Contracts
The following
table summarizes the valuation of USO’s securities at December 31, 2019 using the fair value hierarchy:
At
December 31, 2019
Effective January 1,
2009, USO adopted the provisions of Accounting Standards Codification 815 — Derivatives and Hedging, which require
presentation of qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about
fair value amounts and gains and losses on derivatives.
Fair Value
of Derivative Instruments
Statements of
Fair Value
at December 31,
Derivatives
not Accounted for as Hedging Instruments
Condition Location
Futures
- Commodity Contracts
The
Effect of Derivative Instruments on the Statements of Operations
For the year
ended
December 31, 2018

Accounted
for as Hedging
Location of

Gain (Loss)
on Derivatives
Recognized in

gain (Loss)
Change in

Unrealized
Gain (Loss)  on
in Derivatives
Realized
gain (loss) on closed positions
Change in unrealized
gain (loss) on open positions
NOTE 9 - RECENT
ACCOUNTING PRONOUNCEMENTS
In August 2018,
the FASB issued Accounting Standards Update (“ASU”) No. 2018-13, which changes certain fair value measurement disclosure
requirements. The new ASU, in addition to other modifications and additions, removes the requirement to disclose the amount and
reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and USO’s policy for the timing of transfers between
levels. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim
periods within those fiscal years. USO has evaluated the implications of certain provisions of the ASU and has determined that
there will be no material impacts to the financial statements.
NOTE 10 —
SUBSEQUENT EVENTS
USO has performed
an evaluation of subsequent events through the date the financial statements were issued. This evaluation did not result in any
subsequent events that necessitated disclosures and/or adjustments.

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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Other recent filings from the company include the following:

United States Oil Fund, Lp Monthly Account Statement - Sept. 28, 2021

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