U.S. Oil Fund Rises 64% YTD but Lags Oil by Contango Roll Losses
U.S. Oil Fund has gained 64% year-to-date but delivered just 39% over the past decade due to contango drag on its monthly WTI futures rolls. WTI crude climbed from $57.21 on January 2 to $71.13 as Persian Gulf supply disruptions pushed near-term prices higher.
1. Year-to-Date and Long-Term Returns
The U.S. Oil Fund surged 64% year-to-date through March 9, 2026, yet its compounded return over the past decade stands at just 39%. Over the past three years, USO managed only a 15% gain despite multiple oil price cycles, highlighting the gap between spot oil moves and fund performance.
2. Contango Roll Impact
USO holds front-month WTI futures and sells expiring contracts to buy the next month’s futures, generating losses when the futures curve is in contango. These monthly roll losses, combined with a 0.6% expense ratio, erode returns and explain why shareholders underperform spot oil prices over time.
3. Oil Price Drivers and Alternative Exposures
WTI crude’s jump from $57.21 to $71.13 was driven by Persian Gulf supply disruptions and geopolitical tensions. Traders seeking oil exposure can also consider leveraged ETFs like ProShares UCO or equity stakes in integrated producers such as ExxonMobil and Chevron, which avoid roll-yield drag.