For now, bullish speculators appear to be taking a break from oil.
“John Kilduff, founding partner at energy hedge fund Again Capital said oil’s more than 5 percent plunge to roughly three-month lows on Wednesday was the final nail in the coffin for speculators. The high trading volume indicates they are selling out of their bullish positions,” reports CNBC.
Traders looking to profit from falling oil prices have plenty of ETF options, including the ProShares UltraShort Bloomberg Crude Oil (NYSEArca: SCO), which tries to reflect the two times inverse or -200% daily performance of WTI crude oil, and DB Crude Oil Double Short ETN (NYSEArca: DTO), which also follows a -200% performance of oil.
“Meanwhile, Kilduff noted, oil drillers were busy hedging their production, a practice in which they lock in a cost for delivery of crude to protect against future price declines,” according to CNBC.
For more information on the crude oil market, visit our oil category.