The United States Oil Fund (USO) has delivered one of the most dramatic commodity ETF performances in recent memory, surging from approximately $66 at its December 2025 low to an intra-year peak of $154.08 in May 2026 — a gain exceeding 130% at its zenith. After pulling back into the $118–$125 range by mid-July, the question on many traders' minds is whether USO can mount another leg higher and reclaim the $140 threshold. That level represents not only a round-number psychological marker but also a zone that, if breached, would put the 52-week high squarely back in play.
USO is a commodity-focused exchange-traded fund (ETF) that seeks to track the daily percentage movements of West Texas Intermediate (WTI) light, sweet crude oil futures. Unlike equity energy ETFs such as the Energy Select Sector SPDR Fund (XLE), USO does not own shares of oil producers, refiners, or pipeline companies. Instead, it holds near-month WTI futures contracts and rolls them forward each month as they approach expiration. With approximately $1.88 billion in net assets and an expense ratio of 0.86%, USO functions as a pure-play instrument for investors seeking direct exposure to crude oil price movements without trading futures accounts.
The 2026 surge in USO has been driven almost entirely by the de facto closure of the Strait of Hormuz beginning in late February. Before the disruption, roughly 20% of global oil supply transited through this narrow waterway. The supply shock pushed WTI crude sharply higher, and USO — holding front-month futures — tracked the move with remarkable precision. The fund reported net income of $983.7 million in the first quarter of 2026, compared to just $40.3 million a year earlier, underscoring the magnitude of the price dislocation.
The U.S. Energy Information Administration's (EIA) May Short-Term Energy Outlook projected global inventory draws of 8.5 million barrels per day during the second quarter, supporting Brent crude near $106 through June before an anticipated decline toward $89 by the fourth quarter as Middle East flows potentially resume. As long as Hormuz transit volumes remain at a fraction of pre-crisis levels — Kpler data showed crossings at roughly 10% of normal in mid-April — the supply-demand imbalance provides a powerful tailwind for USO returning toward $140.
Beyond the headline price of crude, USO currently benefits from a structural feature of the futures market known as backwardation. When near-month contracts trade at a premium to deferred months — as they have throughout much of 2026 — USO sells expiring contracts at higher prices and buys the next month at a discount. This "roll yield" adds to net asset value before spot crude moves a single dollar. During the first quarter, this mechanism helped USO's NAV outperform its benchmark by more than six percentage points.
However, this tailwind is entirely reversible. If the Strait of Hormuz reopens and the futures curve flattens or shifts into contango — where front-month contracts trade at a discount to later months — USO would incur a monthly cost to roll its positions, bleeding NAV even if spot crude prices remain stable. The spread between front-month and six-month WTI contracts, published daily by the CME, serves as the critical indicator to monitor.
The single largest risk to the $140 target is a diplomatic resolution that restores Hormuz transit. On April 8, 2026, when political signals briefly suggested a conditional pause in military operations, crude prices plunged 13% to 17% in a single session — a vivid demonstration of how rapidly the geopolitical risk premium can evaporate. Some analysts have estimated that full Hormuz normalization could push WTI back toward $75 per barrel within weeks, which would likely drag USO substantially below current levels.
Additional headwinds include the potential for demand destruction at elevated price levels, coordinated releases from strategic petroleum reserves among consuming nations, and the risk that the futures curve flips into contango before spot prices stabilize. The EIA's forecast of Brent declining to $79 by 2027 assumes a gradual resumption of Middle East flows, and any acceleration of that timeline would compress the window for USO to mount a recovery rally.
From a technical perspective, USO has established a support zone between roughly $104 and $110 during recent pullbacks in late June and early July. This area corresponds to levels where buyers previously stepped in, and it sits above the psychologically important $100 round number. On the upside, $130 served as resistance in mid-June and represents the first major hurdle on the way to $140. Above that, the May peak of $154.08 looms as the ultimate test. For USO to reach $140 sustainably, it would need to clear $130 with conviction — ideally on elevated volume confirming institutional participation.
Despite the pullback from May highs, investor interest in USO has remained elevated. The fund recorded net inflows of approximately $531 million over the month ending mid-July, representing a 26% increase in assets. Daily trading volumes have averaged well above historical norms, reflecting both conviction positions and tactical trading around geopolitical headlines. The elevated put/call ratio of approximately 1.0 on a 30-day basis suggests a balanced but cautious options market, with significant hedging activity alongside directional bets.
Navigating a volatile commodity ETF like USO requires timely and data-driven decision-making. Tickeron's AI Daily Buy/Sell Signals leverage artificial intelligence to continuously monitor thousands of stocks and ETFs, generating Buy, Sell, or Hold signals based on evolving technical patterns, market conditions, and AI-driven analysis. Rather than manually scanning charts and news flow, traders can use these signals to identify emerging opportunities, manage existing positions, and stay ahead of shifting trends in fast-moving instruments like USO. The platform consolidates complex data into actionable signals, helping traders respond more efficiently to market changes.
The question of whether USO can reach $140 is ultimately a question about the Strait of Hormuz. Under a scenario where transit volumes remain severely constrained and the backwardated futures curve persists, the structural and mechanical forces supporting USO make a move toward $140 entirely realistic — particularly given the ETF's demonstrated ability to rally more than 100% in a matter of months earlier this year. The roll-yield advantage, sustained supply deficits, and elevated fund inflows all align in favor of further upside.
However, the risks are equally substantial and unusually binary. A single diplomatic headline could erase weeks of gains in hours, as the April 8 price action demonstrated. The futures curve could flip from tailwind to headwind without warning. Investors monitoring USO should focus on two primary indicators: weekly tanker-tracking data showing Hormuz transit volumes, and the WTI futures strip for evidence of curve flattening. Until either signal decisively turns negative, the path toward $140 remains open — but it is a path paved with geopolitical uncertainty that demands constant vigilance.
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
A.I.dvisor indicates that over the last year, USO has been closely correlated with USOI. These tickers have moved in lockstep 95% of the time. This A.I.-generated data suggests there is a high statistical probability that if USO jumps, then USOI could also see price increases.
| Ticker / NAME | Correlation To USO | 1D Price Change % | ||
|---|---|---|---|---|
| USO | 100% | -2.01% | ||
| USOI - USO | 95% Closely correlated | N/A | ||
| IAUM - USO | 17% Poorly correlated | +0.10% | ||
| SLVO - USO | 16% Poorly correlated | N/A | ||
| GLDI - USO | 12% Poorly correlated | N/A | ||
| PSLV - USO | 6% Poorly correlated | +1.08% | ||
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