{
  "id": 5738684,
  "title": "Oil ETFs Are Crushing Oil Itself, Thanks to the Futures Curve",
  "url": "https://urgent.news/2026/09/04/oil-etfs-are-crushing-oil-itself-thanks-to-the-futures-curve",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-04T01:49:11.000Z",
  "source": {
    "name": "Yahoo Finance",
    "slug": "yahoo-finance",
    "url": "https://finance.yahoo.com/markets/commodities/articles/oil-etfs-crushing-oil-itself-014911123.html"
  },
  "original_language": "en",
  "account": "Oil prices have surged this year, benefiting oil futures exchange-traded funds (ETFs). However, the true story lies in the structure of the futures curve, which has propelled the largest oil fund far ahead of the oil itself. Since the beginning of the year, the United States Oil Fund (USO) has risen 105.5%, almost double the 59% increase in the immediate crude futures. Oil prices have also climbed significantly, from $57.42 at the start of the year to $91.30 currently. Yet, the futures curve is the reason USO has outperformed the commodity it tracks. USO holds front-month oil futures, the contracts nearing expiration. When these contracts expire and the fund transitions to the next month's contracts, the difference in prices can either boost or harm returns based on the curve's shape. During backwardation, when the following month's contract trades lower than the current one, the fund buys more contracts for the same money, which tends to enhance returns. Since the onset of the Iran conflict on February 28, the oil market has experienced steep backwardation. Traders have heavily favored near-month contracts due to the supply disruption in the Strait of Hormuz, while later-month contracts have risen less, expecting the disruption to be temporary and supplies to normalize. This expectation has proven incorrect as oil prices remain higher than initially anticipated, and the curve has stayed backwardated. Consequently, when USO rolls, it can sell October contracts and acquire about 3.4% more November contracts, adding to its returns as long as oil stays around $91.30 or higher. Over this period of steep backwardation, this roll yield is the primary reason for the significant gap between the return on oil and the return on the fund. The impact is even more pronounced when compared to oil's peak. West Texas Intermediate (WTI) closed near $113 on April 7, its yearly high, and has since dropped over 19%. However, over the same span, USO is up about 3%. The same trend applies to Brent, the other major benchmark. It peaked above $118 on March 31, and dropped more than 19% to trade under $96, but the United States Brent Oil Fund (BNO) is up 7.5% over that period. This is an uncommon situation for holders of these funds. Despite oil prices being flat or lower since their wartime peaks, the steep backwardation has allowed returns to continue accumulating.",
  "summary": null,
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}