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USO Lags Spot WTI by Half Over Decade Due to Persistent Roll Costs

USO has surged 114% year-to-date but its 10-year return of roughly 55-57% captured only about half of spot WTI’s gains from the 2016 trough. Persistent contango has forced costly monthly rolls that erode NAV, a problem only partially mitigated by the 2020 shift to spreading contracts across months after the negative-price event. In contrast, Brent-focused BNO returned 281% and energy-equity ETF XLE gained 169% over the same period, underscoring structurally different exposures for long-term oil investors.

Category

UK Brent Oil

Sentiment

Bearish

Event

Market commentary

Reading time

1 min