USO Stock Is Up 99% Year-to-Date — But There Are Critical Things Every Investor Needs to Understand Before Buying It

The United States Oil Fund, which is traded on the NYSE Arca and has the ticker USO, moved 11.15% in a single session on April 2, 2026. For the first time in its twenty-year existence, the fund reached an intraday high of $140 before closing at $137.92. 63.7 million shares were traded that day, more than twice as many as the fund’s daily average. In short, a lot of people wanted in. Oil was the trigger. Physical Brent cargo was trading at $141 per barrel, the Strait of Hormuz remained essentially closed after Iran’s March 2 shutdown, and both institutional and retail traders were aiming for the easiest access to crude oil exposure on a typical brokerage screen. That meant USO for the majority of them.

Up until early April, the year-to-date return on USO was approximately 99.42%. On a NAV basis, the one-year return is approximately 103%. Tracking oil prices in the mid-$60s per barrel, the fund began 2026 trading at about $70 per share. Since then, it has covered an incredible amount of ground in an incredibly short amount of time.

For background, physical spot prices for oil reached $141 by early April of 2026, more than doubling in just one quarter from the initial price of about $66 per barrel. The majority of that change has been reflected in USO, which has emerged as the preferred tool in a crisis situation where retail investors seek oil exposure without opening futures accounts or handling actual delivery. This year’s average daily volume is roughly three times higher than it was during the same time in 2025.

USO was established in April 2006 and debuted at $68.25 on its first day of trading. The fund primarily invests in near-month NYMEX futures contracts on WTI Light Sweet Crude Oil, which is the benchmark grade supplied to Cushing, Oklahoma. USO rolls over its exposure into the following month’s contract over a five-day window at the start of each month as the front-month contract gets closer to expiration.

Even though it’s simple to ignore when prices are rising and returns are positive, this roll is where the fund’s mechanics significantly differ from just “holding oil,” and it’s a distinction that matters greatly over longer time horizons. Each roll essentially entails selling low and buying higher in a situation where crude oil futures are in contango, where the contract for the following month is more expensive than the current one. This creates a persistent performance drag that builds up over time. The roll has recently worked in favor of USO rather than against it because futures are actually in backwardation in the current crisis environment—the near months are priced higher than deferred months, reflecting the physical tightness everyone is experiencing. It won’t always be the case.

It is advisable to read the fund’s own prospectus before investing. “An investment in USO should not be viewed as an investment in the Benchmark Oil Futures Contract or light sweet crude oil,” the document explicitly states. The fund is specifically intended to track daily price changes over a 30-day period; it is not a stand-in for long-term crude oil ownership.

More vividly than any disclaimer, the 2020 reverse split conveys that longer story. In order to consolidate shares following the COVID-era demand destruction and the brief period when WTI front-month futures actually went negative, USO executed a 1-for-8 reverse share split on April 28, 2020. Prior to that split, investors who had held USO as a long-term oil position had seen significant NAV erosion due to rolling costs. Despite the remarkable gains of the past year, the 10-year price return through early 2026 is actually negative, at about –7%. That is the best example of why USO is not a savings vehicle but rather a trading tool.

None of which lessens what USO is currently doing in this specific market. The fund is operating as intended, accurately reflecting the daily movement of crude oil futures during a time when those futures are sharply moving in one direction. USO is a liquid, accessible, and reasonably transparent tool for traders who wish to express a short-term perspective on oil prices, whether that perspective is that prices remain high because Hormuz is still closed or that a ceasefire brings relief and a quick correction. For a commodity ETF, the expense ratio of 0.70% is reasonable. On it, options are traded. There is a narrow bid-ask spread. It fulfills its promises and does so within the specified time frame.

It’s difficult to ignore the fact that instruments like USO draw capital that occasionally understands the mechanics and occasionally doesn’t when geopolitical shocks drive commodity prices. The April 2 volume spike was caused by both retail investors seeking exposure after seeing a chart that had doubled and legitimate oil traders positioning for additional gains. The same fund is being used by both groups. Each of them has a different set of questions.

The trader wants to know what Brent and WTI do over the next thirty days, including whether the Hormuz closure is extended, whether ceasefire talks result in anything long-lasting, and whether OPEC production increases actually translate into actual barrels reaching markets. The question for the longer-term investor is whether USO is the best vehicle at all or if equity positions in oil producers or direct commodity exposure through a longer-dated fund might better capture a stable oil price environment without the roll drag. It is worthwhile to ask both questions. At the moment, neither has a straightforward response.