Shares of United States Oil Fund LP fell more than 16% on Monday after it said it would sell all of its front-month crude contracts to avoid a repeat of the heavy losses suffered last week after crude prices cratered.

USO, the United States' largest crude exchange-traded product, declined 39% last week. Retail investors sold the ETF heavily in tandem with a dramatic decline in expiring May oil futures. Fuel demand has dropped 30% worldwide and supply is filling tankers rapidly, leaving production stranded.

After the latest changes, USO will hold contracts expiring as late as June next year, a drastic reappraisal of its previous strategy that focused almost entirely on heavily traded near-term contracts.

"The ramifications of these changes completely alters what USO was designed to do - reflect spot pricing," said Billy Bailey, portfolio manager for hedge fund Saltstone Capital, which has investments in oil and gas assets.

When oil slumped last week, USO had already sold its position in the May futures, but the fund has since rebalanced its portfolio out of near-term futures contracts three times to avoid the possibility of being caught with expiring positions. In its regulatory filing, USO cited "evolving market conditions" for its decision.

The May contract slumped so far into negative territory as investors realized that the United States is running short of storage due to a 30% drop in worldwide fuel demand and an abundance of supply.

USO is also planning to hold substantially more cash to satisfy potential margin requirements.

The portfolio will now be invested about 30% in the July contract and about 15% each in the August, September, October and December contracts. Almost 10% will be invested in the June 2021 contract.

From May 1, USO's positions will be rolled over 10 days before the contracts expire, instead of four previously, the fund said in a filing.

USO shares (USO) were trading at $2.15, down 16.3% in early afternoon trading.

Before a futures contract expires, USO rolls over its holdings into the following month's contract if it can not take physical delivery of the oil.