NEW YORK: The United States Oil Fund LP , the largest US oil-focused exchange-traded product, stated on Friday in a regulatory filing that it has gained approval to resume offering new shares.

USO's registration of 1 billion new shares has been declared effective by the Securities and Exchange Commission, the fund said, and hence it can once again allow authorized purchasers, or market makers for exchange-traded products, to issue new USO shares.

USO shares were little changed on Friday at $26.35.

On April 21, the fund stated that it had issued all of its registered shares and was thus suspending the creation of new shares. As a result of the suspension, there was a significant discrepancy between the fund's trading price and the performance of the oil futures it held.

Following a sharp plunge in oil, in which expiring May US crude contracts traded at negative prices, USO took in heavy inflows from investors betting on a rebound.

Oil prices have in fact risen substantially since then. Even with losses this week, US crude was trading near $36 a barrel on Friday, about $10 higher than a month ago.

Even so, because later-dated oil futures are currently trading at higher prices than nearer-dated futures - a phenomenon called contango - USO's structure requires it to sell cheaper futures to buy more expensive ones as nearer-dated contracts expire. As a result, investors who hold USO could wind up with losses.