Conversely, investors have not favored inverse oil ETFs. Since the start of the fourth quarter, the ProShares UltraShort Bloomberg Crude Oil (NYSEArca: SCO) and the PowerShares DB Crude Oil Double Short ETN (NYSEArca: DTO) have lost nearly $36 million combined despite posting gains north of 3%. [Investors Avoid the Best Leveraged ETFs]

However, as the FT notes, there is more to the story and it helps explain the surge of inflows to USO. While traders are eschewing use of inverse oil ETFs, they are shorting shares of USO, leading to an increased shares outstanding tally and subsequent rise in AUM because new shares of the ETF must be issued to satisfy short, as well as long demand.

One way of looking at that scenario is that even if oil prices keep tumbling it would be reasonable to expect USO to get bigger with a significant portion of that growth fueled by short sellers.

United States Oil Fund

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