Investors Pull Hundreds of Millions From Oil Funds After Rally

(Bloomberg) -- After piling into oil like never before, retail investors are starting to pull back.

Traders on Wednesday pulled $205 million from 12 of the world’s most-watched exchange-traded funds that bet on the price of oil increasing, according to Bloomberg calculations. That’s the biggest collective withdrawal in just under two years. The move follows a record outflow from Europe’s largest oil ETF last week.

Investors and retail traders piled into crude oil funds over the course of March and April as crude prices plummeted, with West Texas Intermediate eventually falling below zero. That drew regulator scrutiny of the largest, the U.S. Oil Fund, and led to several others either running out of shares to issue or halting the creation of new shares to limit their growth.

The inflows and subsequent recovery in crude prices saw the collective value of the world’s biggest oil ETFs jump from about $3 billion to more than $13 billion between March and June. Now that surge is in reverse.

More than half of the outflow on Wednesday came from the U.S. Oil Fund, one of the most dominant players in the market for crude futures. Investors withdrew a net $112.4 million from the fund, reducing its assets by 2.3% to $4.87 billion, according to data compiled by Bloomberg. That was the biggest one-day decrease since April 6 and the third straight day of outflows.

Others that saw withdrawals Wednesday included the Samsung S&P GSCI Crude Oil fund and the ProShares Ultra Bloomberg Crude Oil fund.

©2020 Bloomberg L.P.