Investors pull cash from oil despite OPEC cuts as demand fear lingers

(Bloomberg) — One oil exchange-traded fund saw its largest one-day outflow in more than three years, a possible sign that some investors remain concerned about the outlook after OPEC+ delivered an unexpected supply cut.

WisdomTree’s Brent Crude Oil ETP — ticker BRNT — had an outflow of $55.7 million on Thursday, the largest one-day fall since late 2019. Another fund, the ProShares Ultra Bloomberg Crude Oil ETF — ticker UCO — saw outflows of $158.5 million last week. That’s its biggest weekly drop since March 2022.

The Organization of Petroleum Exporting Countries and its allies announced a surprise output cut earlier this month, led by Saudi Arabia. While that helped prices to surge last week, concerns about a potential slowdown in demand have lingered. There’s speculation both that the U.S. could tip into recession, hurting consumption, and OPEC+ actions telegraph its concerns about market weakness.

“There is still a large segment of the market concerned over the demand outlook and OPEC+ cuts would have likely only reinforced these concerns,” said Warren Patterson, head of commodities strategy at ING Groep NV in Singapore.