Despite the plunge in oil prices, with Brent crude now trading below $100 per barrel, oil-related exchange traded funds have been attracting more investment interest.
Since June 19 highs, the United States Brent Oil Fund (NYSEArca: BNO) plunged 2.5% while the United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate oil futures, decreased 11.1%.
Meanwhile, USO attracted $299.1 million in new assets and BNO added $2.4 million since June 19, according to ETF.com data.
Surprisingly, inverse oil ETFs that profit off the decline in the energy market have experienced outflows, despite generating significant returns.
For instance, the ProShares UltraShort Bloomberg Crude Oil (NYSEArca: SCO), which tries to reflect the two times inverse, or -200%, daily performance of WTI crude oil, experienced $231.9 million in outflows since June 19 but surged 24.0% over the period. The United States Short Oil (NYSEArca: DNO), which tracks the opposite moves of light, sweet crude oil, lost $1.6 million in assets but gained 11.9%. The VelocityShares 3x Inverse Crude (NYSEArca: DWTI), which tracks the daily -300% performance of oil prices, saw $8.5 million in outflows but jumped 35.9%.
WTI crude oil now trades around $93 per barrel while Brent crude hovers around $98.2 per barrel.
Looking ahead, we might be in for further oil weakness as the International Energy Agency downwardly revised global oil demand to 0.9 million barrels a day in 2014, a 65,000 barrels a day decrease from its previous forecast, with oil demand growth in the second quarter at its lowest in two-and-a-half years, the Wall Street Journal Reports. [Poor Fundamentals Sap Energy From Oil ETFs]