United States Oil Fund’s 55% return since 2014 lags spot WTI’s 114% gain, driven by contango-induced roll expenses.
The United States Oil Fund (USO) has underperformed West Texas Intermediate (WTI) crude by nearly half over the past decade, returning 55% compared to WTI’s 114% gain. The gap stems from roll costs, as USO repeatedly sells expiring futures contracts at lower prices and buys higher-priced new contracts in contango markets.
USO, which holds $2.2 billion in assets, tracks front-month WTI futures rather than physical oil. Its 0.83% expense ratio and structural roll costs erode long-term returns, contrasting with the Brent Oil Fund (BNO), which has returned 281% over the same period due to more favorable market dynamics.
Year-to-date, USO has risen 114% alongside WTI’s rally, but the fund’s historical underperformance highlights the drag of futures-based exposure over full oil cycles.