The United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate oil, plunged more than 42% last year, making it one of 2014’s worst-performing non-leveraged ETFs.

Oil’s woes have not abated this year. West Texas Intermediate futures fell 1.5% Tuesday to $43.22 per barrel, the lowest closing price for the benchmark U.S. contract in six years. Down more than 21% to start 2015, ranking it among the 10 worst non-leveraged ETFs to start the year, USO was one of 13 ETFs to hit all-time lows yesterday.

None of those factoids mean USO’s pain is over.

“10 days we warned “the sharp slide in crude prices may be leading the proverbial sheep to slaughter,” as we noted ther surge in Oil ETF USO’s shares outstanding and the spike in Oil price contango – a potentially ugly combination for an ETF ahead of the roll. Since then, USO has indeed tumbled over 14%. However, it;s not over yet – in the last 3 days alone, the USO share count has soared 10% (the fastest pace in 2 months) almost at its Feb 2009 record highs as investors “know” the bottom is in now and continue to catch the gapping-lower-every-day, massively contango’d, ETF knife,” reports Zero Hedge.

The scenario of USO’s rising shares outstanding tally surging as the ETF plummets is not new and it is easily explained. Some traders simply prefer to short USO to capture oil’s downside rather than be long inverse oil products, such as the ProShares UltraShort Bloomberg Crude Oil (NYSEArca: SCO) and the DB Crude Oil Double Short ETN (NYSEArca: DTO). [Inverse ETFs for Bearish oil Trades]

When traders borrow shares of USO to sell short, those new shares must be created, giving the impression that the ETF’s assets under management and shares outstanding counts are rising. Likewise, when those borrowed shares are covered, USO’s AUM and shares outstanding will decline.

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