Investors betting on a rebound in oil keep piling into exchange-traded funds only to get burned as efforts to stabilize the crude market fall short.

The largest actively-managed oil-focused ETFs boosted their net holdings of crude by more than 400 per cent over the past month, a sign of surging flows to the funds as the price of oil dropped 67 per cent this year. Traders added US$371 million to the United States Oil Fund LP on Tuesday, the most since 2008, while the ProShares Ultra Bloomberg Crude Oil, or UCO, saw the largest single-day increase in its history.

With crude now trading at an 18-year low amid a plunge in demand due to the coronavirus panic, most bets on a rebound have lost money so far. The latest disappointment for bulls came this week as prices continued their drop even after OPEC and other producers agreed to curtail production by 9.7 million barrels a day, the largest coordinated cut in history. Still, oil tumbled more than 10 per cent on Tuesday.

“One, it was already baked in that you’re going to get some sort of a deal and two is compliance and how people actually comply with these sorts of cuts,” said Matt Orton, vice president and portfolio specialist at Carillon Tower Advisers. “Russia doesn’t exactly have the best history of doing this. Really, I think the bigger question mark is the demand side.”

Although the OPEC+ deal helps resolve a key issue, economic shutdowns to curb the coronavirus will cut global oil demand a record 9% this year, the International Energy Agency forecast Wednesday.

Investors often use the USO fund to make bets on short-term price reversals, for instance to buy dips and sell rallies. There’s been plenty of opportunity for that given the volatility in the market.

Those using USO as a long-term trading vehicle are poised for extra pain due to a pricing structure in the oil market known as contango, in which current oil futures contracts are priced lower than the next month.

The fund would lose money in a contango market when it sells the futures as they near their expiry on April 21 and buys the next month.