This past month, the near-dated WTIC contract (CL) went negative, which I assume is a first for any commodity contract. The May CL contract didn't just go negative but it went very negative. Now, this is not suppose to happen but at the height of the Covid lockdown, the market deemed that supply of oil would outstrip demand by such a devasting margin that people would need to be paid to take possession of it. I'm not totally sure the result wasn't a factor of a massive deleveraging and "the baby got thrown out with the bath water" but nevertheless, it happened and it wrecked USO as well.
For years, I have sought to enlighten the investing community regarding the futulity of commodity-based Exchange-Traded Products such as USO. It is not that I am bearish on commodities, it is just the structure and trading limitations forced upon these funds by the SEC and other security regulators results in them severly underperforming the underlying commodity. And their blanket underperformance took place long before the "negative roll yield" phenomenon that took over the commodity futures space starting around 2011 - 2012.
This past month was no different. USO was trashed as the contract it has been rolling went negative. Of course, further out contracts held up alright. For exampl,e the December '20 contract never traded below $26.
Here are a couple articles I have written over the years that detail the issues with USO:
Everyone is Fleeing Oil's Biggest Fund (written 5/29/15)
The Epic Failure of Commodity Funds (written 7/24/14)
For investors looking for direct exposure to oil or any other commodity, we might suggest opening a commodity futures contract which can be accomplished at most online brokers such as TD Ameritrade and Charls Schwab.