After trading at an elevated premium for an extended period, the oil ETN plunged 17% Thursday, despite the rally in oil prices., as authorized participants finally stepped into arbitrage some of the difference between the ETN’s price and underlying value.

Fueling the price disparity between the ETN and its underlying index, Barclays implemented a 50-cent per-share fee on any new share creation of the ETN as of September 15. Dave Nadig, director of exchange-traded funds at FactSet Research Systems, explained that many banks are trying to get out of the ETN business. While many have closed smaller ETNs, Barclays decided it was better to just impede new shares of OIL instead.

Barclays “effectively caused the disconnect between the trading price and the fair value” by adding that fee, Nadig told the WSJ.

iPath Crude Oil Futures ETN

Max Chen contributed to this article.