MW Crude oil is trading like a 'meme stock', these charts show
By Joseph Adinolfi and Joy Wiltermuth
Retail traders have rushed into popular crude-oil ETFs as volatility soars
Wild swings in crude-oil prices are drawing more individual investors to trade the critical commodity.
Crude-oil prices haven't been this volatile in years - and individual investors can't seem to get enough.
Enthusiasm for the recent tumult has led to skyrocketing trading volumes in the oil-centric United States Oil Fund USO, a popular exchange-traded fund with individuals, much like the frenetic trading activity in recent months in major silver SIL and gold GLD ETFs.
"When you have this retail vortex coming in and starting to speculate in the commodity space, it's amplifying not only moves in ETF, but actually commodities too," said Mike Treacy, head of market risk at Apex Fintech Solutions. "That's how it was in silver just a few months ago."
What's more, the vital commodity could continue to trade "like a meme stock" until peace returns to the Persian Gulf, according to a strategist at Macquarie.
The latest catalyst for oil was the International Energy Agency on Wednesday announcing it would release 400 million barrels of oil into the market, confirming reports that emerged late Tuesday, yet oil prices still were climbing.
Read: IEA unveils largest-ever release of reserves: Why oil prices have continued to move higher
To help put the IEA's historic decision in context, this latest release would be more than double the amount of reserves released back in 2022. Not waiting around, Japanese Prime Minister Sanae Takaichi said her country would act first and unilaterally release its own reserves beginning as soon as Monday.
In U.S. stocks, the market impact was more volatility, with the Dow Jones Industrial Average DJIA off almost 500 points, or 1%, near a session low around midday. U.S. benchmark West Texas Intermediate crude futures (CL00) (CLJ26) were 3.5% higher, near $87 a barrel, according to FactSet. Brent crude futures (BRN00), the global benchmark, were up more than 4% at $91.64 a barrel.
So, why haven't these headlines done more to calm an unsteady global oil market? Macquarie's Thierry Wizman said while 400 million barrels might seem like a lot, it is roughly equivalent to just four days of global production, and just 16 days of volume that typically passes through the Persian Gulf, in written commentary shared with MarketWatch.
"The strategic reserves are not a permanent solution, of course, and crude oil will continue to trade like a 'meme stock' until the solution is peace," Wizman said.
"At the end of the day, all that matters is the Strait," said Seth Meyer, global head of client portfolio management at Janus Henderson Investors. Until the Strait of Hormuz is reopened, markets could be stuck with voracious appetite for trading around oil volatility. "It's turned into a Polymarket where it's like: I want to trade on everything," Meyer said.
To be sure, crude-oil isn't the only commodity to be compared with a meme stock in 2026. Earlier this year, some on Wall Street were drawing similar parallels with silver as prices of the white metal shot into the stratosphere and individual investors rushed to trade popular silver ETFs.
Now, these investors are doing the same with popular crude-oil ETFs. Vanda Research, which has a proprietary data set that tracks retail investors' buying and selling in popular stocks and ETFs, found that retail buying in a handful of crude-oil ETFs has soared.
Just because retail investors are buying these ETFs and ETNs, doesn't mean they are necessarily long oil. The group tracked by Vanda includes the biggest tradeable oil vehicles, which offer investors exposure to further upside in the price of the commodity: United States Oil Fund USO, ProShares Ultra Bloomberg Crude Oil UCO, Invesco DB Oil Fund DBO, ProShares K-1 Free Crude Oil Strategy ETF OILK, Defiance Oil Enhanced Options Income ETF USOY, MicroSectors Oil & Gas Exploration & Production 3X Leveraged ETNs OILU, United States 12 Month Oil Fund USL and the United States Brent Oil Fund BNO.
The one-month total retail buying across this basket of ETFs was $154 million as of Tuesday, the biggest since May 2020, said Viraj Patel, partner and deputy head of research at Vanda. Buying has been particularly pronounced over the past week, with USO, the biggest U.S. oil ETF, seeing its biggest daily inflow on record.
"These may be early signs of a mini-retail bubble forming - something we've seen several times in recent months," Patel said in written commentary.
Retail traders have also been pouring money into less-popular funds that allow them to place a leveraged bet that prices will fall. MicroSectors Oil & Gas Exp. & Prod. -3x Inverse Leveraged ETN OILD has seen big inflows in recent days, Patel said.
Wild swings in the price of oil have caused a gauge of implied volatility to soar to its highest level since May 2020. The Cboe Crude Oil Volatility Index was above 108 in early trading on Wednesday. If it finishes the day at this level, it would be the highest reading since May 11, 2020, according to Dow Jones Market Data.
The Cboe gauge is calculated based on trading activity in options contracts tied to USO.
Crude-oil prices were pressing higher in recent trade on Wednesday, after the IEA announcement did little to suppress prices.
In recent trade, front-month U.S.-traded West Texas Intermediate crude futures (CL00) were up 4% at $87 a barrel, FactSet data showed. Meanwhile, Brent crude futures (BRN00) were up 4.2% at $91.51 a barrel. Brent is the global benchmark for crude prices.
See: IEA unveils largest-ever release of reserves: Why oil prices have continued to move higher
-Joseph Adinolfi -Joy Wiltermuth
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(END) Dow Jones Newswires
March 11, 2026 12:54 ET (16:54 GMT)
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