The United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, continues making new lows. Down more than 2% over the past week, the heavily traded oil exchange traded product is now lower by 21.2% this year, officially putting it in a bear market.

While OPEC is cutting back to alleviate price pressures, U.S. fracking companies could jump to capitalize on the windfall as crude oil prices jump back above $50 per barrel – according to some estimates, shale oil producers can get by with oil at just over $50 per barrel due to advancements in technology and drilling techniques that have helped cut down costs.

On Wednesday, USO and oil prices slumped “after a one-two punch from the Energy Information Administration (EIA) and the International Energy Agency (IEA). Specifically, the EIA reported a surprising rise in U.S. gasoline inventories last week, while the IEA warned of a continued oil supply glut through 2017. Against this backdrop, the United States Oil Fund (USO) is exploring annual lows, and options on the oil exchange-traded fund (ETF) are flying off the shelves,” reports Schaeffer’s Investment Research.

Some oil market observers see more declines coming for crude. Oil traders are concerned over how fast U.S. shale oil producers will increase production to capture the rising prices.

Rig counts have recently ticked higher and with credit and earnings issues improving for some U.S. shale drillers, those companies may seize the opportunity to exploit higher pricing in the near-term.

USO currently resides 10% below its 50-day moving average and 14.6% below its 200-day line, both of which are bearish signals. The ETF labors 23.6% below its 52-week high.

“It’s no surprise to find that the top five most active United States Oil Fund options are puts, led by the now in-the-money June 9.50 put, where more than 81,000 contracts have traded. With most of the action on the bid side, it seems many traders are taking profits on the puts ahead of Friday’s expiration, with USO shares down 3.6% at $9.25, and just off an annual low of $9.20. Meanwhile, the August 9 and June 9 puts have taken silver and bronze, respectively,” according to Schaeffer’s.

For more information on the crude oil market, visit our oil category.