Short sellers heavily bet on a crash in crude oil, most facing significant losses

ME News update, April 2 (UTC+8). A group of oil traders launched a major short bet, wagering that oil prices driven by the war would retreat from their elevated levels, but so far most traders have suffered heavy setbacks. Data shows that in March, ETF investors poured $977 million into the ProShares UltraShort Bloomberg Crude Oil ETF (SCO), setting a record for the largest single-month inflow since the fund was launched in 2008. SCO provides two times the inverse return of crude oil price movements on a daily basis. Despite the record inflows, SCO’s total assets still stand at just $970 million, below the fund’s total inflows for the month. Asym 500 founder Rocky Fishman said, “This is a bet that ‘the war ends soon’.” After President Trump again hinted that the Iran war could be coming to an end, the fund rose 8%, but it still fell 41% in March, marking its worst performance in nearly six years. However, the short bets are only half the story—long-focused funds also set records. The United States Oil Fund (USO) attracted about $700 million in March, the largest monthly inflow since the pandemic. The U.S. Brent crude oil fund (BNO) pulled in $600 million, the highest in history. The market is highly split, with leveraged funds hedging each side’s bets. (Jin Ten) (Source: ODAILY)