United States Oil Fund reaches Record Investment Levels

Retail investors have poured record amounts of money into oil ETFs.

Investment Data showed investment in oil ETFs like USO, DBO and OIL, a easy way to invest in oil for retail investors, has reached record levels. The number of crude futures contracts held by the United States Oil Fund the largest oil ETF, hit a record high near 80,000 recently.

Oil Has Its Biggest Annual Fall Ever in 2008

Last year, the commodity proved one of the best ways to earn a lot of money - and then, to lose it all. After hitting a record high of 147 a barrel in July, oil fell more than 100 bucks, or 70% by year-end. It closed 2008 down 54%, its biggest loss ever and more than the stock market's enormous slide.

Oil is Down 10% Year to Date

Trading in the first months of this year also didn't bode well for oil bulls. Crude has lost 10% so far this year, compared with a 5% loss in the Reuters/Jefferies CRB commodities index, and a 4% gain in gold prices. Oil is clearly underperforming other commodities and risky assets.

On Friday, crude oil futures fell more than 2 percent on the NYMEX after the U.S. reported a 16-year high unemployment rate and the biggest loss in non farm payrolls in decades.

Inflation Adjusted Record Low for Oil is 18.90 USD in 1986

Some analysts predict oil prices could fall to as low as 25 dollars a barrel in the second quarter comparing to the inflation-adjusted record low for Nymex oil is at 18.90 dollars a barrel, hit on April 1, 1986. In non-adjusted dollar terms, that low was 9.75 dollars a barrel, the only time in NYMEX history that oil fell below 10 dollars a barrel.