Top Oil EFTs See Longest Weekly Run Of Withdrawals In Eight Months

• Four major oil ETFs have seen the longest run of outflows in eight months, with $211 million withdrawn last week alone.
• A commodity strategist with ANZ group believes these outflows will fizzle out and were due to profit taking.
• Having bought the biggest number of contracts or lots in a single week since December 2016, it seems speculators have turned more cautious.

Some of the leading oil exchange-traded funds saw funds withdrawn in the past four weeks for the longest streak of withdrawals in eight months, according to data compiled by Bloomberg.

The funds WisdomTree Brent Crude Oil, United States Oil Fund, WisdomTree WTI Crude Oil, and ProShares Ultra Bloomberg Crude Oil – which collectively account for a quarter of the biggest oil ETFs – saw withdrawals of $211 million last week alone. This was the fourth consecutive week of withdrawals from those funds, making it the longest run of withdrawals since July 2022.

“We see recent outflows are primarily driven by profit-booking as most of the fresh inflows emerged when prices fell below $75 a barrel last month,” Soni Kumari, a commodity strategist with ANZ Group Holdings in Bengaluru, India, told Bloomberg.   

“We see these fund outflows fizzling out rather than gathering pace.”

Last week, oil prices capped a fourth consecutive week of gains, as buying in oil resumed following the announcement from several major OPEC+ producers that they would make additional cuts to output by the end of the year to ensure “the stability of the oil market.”

After an initial surge in buying interest from speculators in crude oil futures following the OPEC+ announcement, buying of crude oil moderated in the week to April 11, according to the latest data from exchanges compiled by Ole Hansen, Head of Commodity Strategy at Saxo Bank.

“Having bought the biggest number of contracts or lots (136k or 136 million barrels) in a single week since December 2016, speculators turned more cautious,” Hansen said, commenting on the latest Commitment of Traders (COT).  

The WTI Crude net position – the difference between bullish and bearish bets – increased by 22,000 lots, on the back of both fresh longs and short covering. But Brent Crude saw a small amount of net selling with long and short positions being adjusted lower, Hansen noted.

By Tsvetana Paraskova for Oilprice.com

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