The FT pointed out this week that smaller investors are turning into a muscular force in the global commodities markets controlling almost a third of the most active US oil futures contracts via ETFs.
The funds’ new heft in the global oil market is “attracting more and more attention” from professional oil traders, said Olivier Jakob, managing director of Petromatrix, a Swiss-based consultancy. After oil staged a modest rally earlier this month, Goldman Sachs argued that “the key force pushing commodity markets higher has been retail investor inflows into oil ETFs”. Investors this year have pumped more than $2bn into the US Oil Fund, the largest oil ETF, bringing assets to $3.1bn. The fund now owns contracts for 64m barrels of WTI, a 10-fold increase from a year ago.