Underscoring the recent bullishness from energy prices, the United States Oil Fund LP (ETF) (NYSE: USO) is up 22.6 percent over the past month. Energy equities are delivering impressive returns as well, as the Energy Select Sector SPDR (ETF) (NYSE: XLE) is higher by 11.7 percent over the same period.

Still, supplies show only modest signs of dwindling, energy earnings estimates for 2016 are contracting, market observers expect oil supply to continue outpacing demand, and it would appear next year could be another rocky one for exploration and production equities.

Energy's Future

While considerable debate remains regarding the near- to mid-term future for energy equities and ETFs such as XLE, what is not arguable is that oil's recent surge has been meaningful for leveraged energy ETFs. Last week, leveraged funds, such as the Direxion Daily Natural Gas Related Bear 3x Shares (NYSE: GASX) saw volume explosions.

Related Link: Hedge Funds Now Strongly Bullish On Oil

“In fact, oil prices jumped over 9 percent in the first week of March, with U.S. crude currently trading around $36/barrel and Brent oil around $39/barrel. With this, U.S. crude prices are up nearly 33 percent and Brent oil is up 27 percent from their 12-year lows hit in mid-February. Some say there are signs that there are more gains to come,” said Direxion in a recent note.

GASX's Surge

Understanding the volume surge in GASX is not complex. The First Trust ISE Revere Natural Gas (ETF) (NYSE: FCG), the ETF GASX is designed to deliver triple the daily inverse returns of, is up nearly 26 percent over the past month. That as Direxion plans to reverse split GASX's bullish counterpart, the Direxion Daily Natural Gas R Bull 2x ETF(NYSE: GASL) later this month.

“OPEC nations dropped oil production by 79,000 barrels/day in February while U.S. production was reduced by 25,000 barrels/day for the week (ending 2/26/2016). The number of oil rigs fell to the lowest level since December 2009, supporting the rally. But is the rally justified? Not according to Goldman Sachs’ Jeffrey Currie in a Goldman report titled 'The New Oil Order – Making Sense of an Industry’s Transformation,'” said Direxion.

Direxion Leveraged ETFs With Volume Increases

For the five days ending March 10, three of the nine Direxion leveraged ETFs experiencing the largest volume increases were energy funds, including GASX, GASL and the Direxion Daily S&P Oil & Gas Exp. & Prod. Bear 3x Shares (NYSE: DRIP).

DRIP, the triple-leveraged bearish answer to the SPDR S&P Oil & Gas Explore & Prod. (ETF) (NYSE: XOP), has plunged nearly 55 percent over the past month. DRIP's volume is more than double the 20-day trailing average over the past week, according to issuer data.

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