Crude oil futures fell below $40 per barrel for the first time since April as the energy market dips deeper into a bear market. Oil exchange traded fund traders, though, are not shying away from the fall.
The United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, attracted $126.6 million in net inflows over the past week, the best inflows since February, according to Bloomberg.
The inflows suggest that oil traders are trying to time a market bottom after USO dropped into bear market territory last week.
Alternatively, the rising inflows may also indicate increased bearish activity as short traders bet on continued weakness in the oil ETF – hedge funds raised their short positions in WTI by 38,897 futures and options combined during the week ended July 26, the largest gain since data was kept from 2006, Bloomberg reports.
SEE MORE: Crude Oil ETF Slips to Bear Market
Crude oil continued to decline Monday after a survey showed output in Organization of Petroleum Exporting Countries hit record highs last month and the U.S. energy industry added the largest amount of oil rigs in two years.
On Monday, USO fell 3.5% and the United States Brent Oil Fund (NYSEArca: BNO), which tracks Brent crude oil futures, dropped 3.0%.[related_stories]
Meanwhile, WTI crude oil futures were down 3.7% to $40.07 per barrel and Brent crude was 3.33% lower to $42.08 per barrel.