To investors in USO: “Best of luck.”

On Monday, the United States Oil Fund (NYSEARCA: USO) fell nearly 15% to close at $2.19. Weighing on the ETF was the latest announcement from USCF, the fund’s administrator, that the fund will close out its positions in the June WTIC futures contract, and roll them over to longer-dated contracts. (CNBC)

Crude oil in free fall

But worse is in store. WTIC fell 25% on Monday and plunged another 20% overnight to $10 a barrel. So what happens to USO?

“There are times in life where people know that there’s an instrument that is faulty, and they can shoot against that instrument and bury these people,” CNBC’s Jim Cramer said Monday.

In Cramer’s view, holders of June WTIC futures are lame ducks because they can’t accept the delivery – because there’s no storage left.

Cramer mentioned his conversation with John Hanson the CEO of the largest tanker company,  North American Tanker (NYSE: NAT) who said: “Look, there’s no room.”

Based on that, Cramer says “crude should go to zero faster than it did last time.”

Analyst: June WTIC headed for (-) $100!

Analysts confirm Cramer’s view. There’s every likelihood of the June contract also going sub-zero, and in triple digits at that. According to Mizuho analyst Paul Sankey, crude could “quite possibly” hit -$100 next month.

“The physical reality of oil is that it is difficult to handle, volatile, potentially polluting, and actually useless without a refinery.”

According to Cramer, the people targeting USO are financial people and large players. “They can wipe out the USO.”

“When you have an organization that can’t take delivery, well you should crush that organization every time, and that’s what probably happened,” he added.

“The people in the USO are naive. They’re rookies, and I wish them the best of luck,” Cramer said.

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