United States 12 Month Oil Fund releases February monthly account statement

USL (United States 12 Month Oil Fund, LP) filed its monthly account statement for the period ended Feb 28, 2026; shares are trading at $49.12 with a year-to-date return of 47% and a six-month gain of 33%. The Form 8-K includes a Statement of Income (Loss) and Statement of Changes in NAV as Exhibit 99.1 per Rule 4.22, but the filing provides no additional financial or operational details.

Analysis

The rebounding Strait of Hormuz tanker flows is a supply-route normalization shock that works through three channels: lower voyage distances and insurance premia, expanded crude arbitrage windows, and a near-term easing of geopolitical convenience premia embedded in Middle Eastern grades. Expect refiners with flexible crude slates to capture the widest margin improvement within 4–12 weeks as Persian Gulf barrels flow back to Asia and Europe, while oil futures term-structure should flip toward less backwardation (or steeper contango compression) as perceived shock risk falls.

Tanker owners and time-charter providers are the direct beneficiaries — utilization and TCEs can rerate by 20–50% from distressed levels if rerouting ceases permanently — whereas firms monetizing extreme-risk premia (specialty insurers, tactical storage/arb players) face margin compression. Second-order: wider arbitrage restores VLCC/Tanker-enabled flows which can pressure inland pipeline receipts and U.S. Gulf differentials over months, softening U.S. export pricing power and favoring refiners over export-centric E&Ps in the medium term.

Key reversals are binary and fast: a single credible attack or escalation can reverse freight/insurance moves in days and reintroduce multi-week rerouting costs; policy moves (SPR sales or OPEC+ tweaks) and a Chinese demand pivot are 1–3 month catalysts that can either amplify or negate this normalization. Monitor Persian Gulf-to-Asia voyage rates, the Baltic Dirty Tanker Index, and 1–3 month Brent contango/backwardation as high-signal indicators — breaches of Brent $100 or a sudden 30–50% spike in TCEs/insurance should trigger reassessment depending on position exposures.

Key Decisions for Investors

• Long STNG (Scorpio Tankers) 3–6 month exposure: buy common or a 3–6 month call spread (size 1–2% NAV). Rationale: direct beneficiary of higher utilization and resumed Suez/Strait economics; target +30–50% if normalization persists. Risk: a renewed security incident could drop the position 25–40%; set a 20% trailing stop or hedge with short freight derivatives where available.
• Pair trade — long VLO (Valero) / short AAL (American Airlines) over 1–3 months: refiners win from cheaper feedstock while airlines face higher jet-fuel volatility and margins. Size 1–3% NAV; target asymmetric 2:1 reward if refinery crack widens by 5–10%. Risk: simultaneous demand shock (China slowdown) compresses both legs; cap downside at 15% via options collar.
• Tactical long in oil futures exposure via USL (United States 12 Month Oil Fund) with roll-risk hedge: allocate up to 2% NAV to USL or equivalent, paired with buying a 2–4 month put on the front-month WTI futures or shorting nearby futures to neutralize adverse roll. Rationale: captures near-term price upside from flow normalization while limiting term-structure erosion. Reward: direct oil upside; Risk: contango/roll cost can erode returns quickly — limit holding period to 1–3 months or exit if front-month contango widens >$3/bbl.
• Long-owner/asset play in crude tanker charters — buy FRO (Frontline) or STNG calls as a 6–9 month swing trade: if utilization and TCEs rise sustainably, equity rerate is likely. Position sizing 1–2% NAV; target 25–40% upside. Risk: geopolitical re-tightening or global demand shock reverses gains; use 25% stop or option-defined loss.