A Big Oil ETF Just did Something Epic

Big moves and ample amounts of attention are not foreign to the United States Oil Fund (NYSEArca: USO), but USO, one of the most heavily traded commodity exchange traded products, just did something really unique.

After surging more than 5% on Monday, good for its best one-day performance since February, USO surged another 3.4% Tuesday, bringing its five-day gain to nearly 12%. The fund’s four-day showing is even more impressive with a gain of 13.3% over that period. [Returning to Energy ETFs]

That is good for the tenth-best four-day run in USO’s history, according to Chris Kimble of Kimble Charting Solutions. As Kimble notes, eight of USO’s nine other largest four-day rallies took place within an 11-month rally between 2008 and 2009.

For the four-day period ending Feb. 3, USO surged nearly 18.5%, but the ETF would proceed to lose 1% through the rest of February. USO is up nearly 4% in the past month.

Although USO has recently been soaring, traders have pulled money from the fund. Since March 23, USO has lost nearly $444 million in assets, though that situation may not be as dire as it seems.

As oil prices fall, USO’s assets under management and shares outstanding counts often rise because some professional traders opt to short USO rather than establish long positions in inverse oil ETFs. New shares must be created to lend to short sellers, but when those traders cover those shorts, USO’s shares outstanding count inevitably falls. Said differently, USO is possibly benefiting from a short squeeze.