HOUSTON (Reuters) - This week’s roller-coaster ride in the global crude oil market was likely fueled in part by the sudden liquidation of a $600 million leveraged fund bet on falling prices, market sources said on Wednesday.

A pump jack stands idle in Dewitt County, Texas January 13, 2016. REUTERS/Anna Driver

Unknown investors in the VelocityShares 3x Inverse Crude Oil Exchange Traded Note (ETN) - which offers the ability to make a bearish bet on prices magnified threefold, with gut-churning ups and downs - bailed out early this week after jumping into the fund in January, ETN data show.

Some 1.8 million shares worth more than $602 million were redeemed on Tuesday, the largest outflow from the ETN in the past year, according to data from FactSet Research.

The selloff suggests that at least some big investors are betting that the worst of an 18-month oil market rout is over after U.S. prices fell to $26 a barrel last month for the first time since 2003. Trading activity has also jumped to the highest levels on record.

“Speculators are getting out of the down oil market. People start unwinding these positions because they think they have gotten their juice out of it,” David Nadig, vice president, director of exchange traded funds for FactSet, said.

The DWTI note inversely tracks the S&P GSCI Crude Oil Index ER, which follows movements in the oil market. And because it offers investors three times the exposure, the impact on the underlying futures is magnified - as is the volatility in the ETN, whose price more than doubled in the first three weeks of January before halving again as oil futures rebounded.

The net asset value of the fund - one of a handful of exchange funds that allows investors to trade oil without the complexity of a futures exchange - fell from close to $1 billion to $417 million on Tuesday and to $322 million on Wednesday, according VelocityShares’ website.

As a result, the mass exodus likely forced the ETN’s issuer, Credit Suisse, to quickly buy back short positions as investors redeemed shares.

VelocityShares, a unit of Janus Capital Group, was unable to comment on the trading activity.

To unwind alone may have amounted to upwards of 40,000 futures contracts on Tuesday, according to estimates by analysts.

There is a day’s lag between when redemptions and creations are ordered and when they show up in share figures, according to Nadig, meaning that Tuesday’s flows were ordered on Monday, when oil reversed a three-day rally to close $2 a barrel lower.

On Wednesday, oil prices surged more than 8 percent to $32.28 a barrel, despite a seemingly bearish report from the U.S. Energy Information Administration showing nationwide crude inventories rose by 7.8 million barrels last week.

Volume in the March West Texas Intermediate futures contract surged on Wednesday to more than 777,000 lots traded, its second highest volume on record, according to data via ThomsonReuters’ Eikon. DWTI volume was also unusually heavy on Wednesday, with more than 1.9 million shares traded.

To be sure, redemptions in the short ETN were not the only driver of higher crude prices. A falling dollar and renewed hopes for a meeting among non-OPEC and OPEC members to curtail global production also bolstered futures values. [O/R]

It is unclear who may have been behind the ETN position, but they ended up on an extraordinarily wild ride. The investment appears to have been made in January, based on asset data showing the note rarely held more than $200 million last year.

Its price peaked at more than $484 on Jan. 20, when oil traded at a low of $26.55 a barrel, but then fell to as low as $225 last week. It surged to $335 on Tuesday before dropping 25 percent on Wednesday. It is still up 24.5 percent for the year.