Oil exchange-traded funds posted their largest week of outflows for more than a year, led by a record withdrawal from the crude market’s biggest ETF.
Investors pulled almost $200 million in a single day from WisdomTree’s Brent crude oil product, which in January became the biggest in the sector. That’s the most since it began trading. There were also withdrawals from other similar instruments, with the United States Oil Fund seeing its biggest weekly outflow since December.
The moves come as investors take profit from long-only oil ETFs after crude prices rallied above $80 a barrel for the first time since April. Brent crude futures are set to gain about 14% this month, aided by a robust demand outlook, OPEC+ supply cuts and increasing confidence in the macroeconomic outlook as traders wager that Federal Reserve interest rate hikes may be coming to an end.
Investors plowed money into WisdomTree’s Brent fund at the end of 2022, helping its assets balloon from about $200 million in December to more than 10 times that amount today. As a result, it is also prone to experiencing larger withdrawals than in the past.
In aggregate a basket of 14 oil ETFs reported outflows of more than $400 million last week, the biggest since March 2022, according to data compiled by Bloomberg.
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