(Bloomberg) -- Investors are cautiously pulling money out of energy producers for the first time in eight months, taking short-term gains after oil rebounded from a six-year low.

More than $1.55 billion has been withdrawn this month from exchange-traded funds concentrated on energy stocks such as Exxon Mobil and Chevron. It’s on pace for the first monthly setback for the group since investors began pouring into the sector in October with an eye toward profiting from an eventual recovery in prices.

“The thesis that oil is too cheap and it has to go higher maybe is not as compelling a case with oil at $60 as it was when it was at $42,”said Ryan Issakainen, a strategist at First Trust Advisors in Wheaton, Ill.

Still, $5.4 billion remains of the new money invested in energy ETFs since the beginning of the year suggesting that traders are trimming positions, not starting a rout.

On May 1, energy ETFs lost $475.8 million, days before U.S. crude closed at this year’s high of $60.93 a barrel on May 6, ending a 49-day rally from a six-year low of $43.46 on March 17, according to data compiled by Bloomberg. Oil closed Wednesday at $57.51.

Because ETFs own baskets of shares, they enable investors to place broad bets on the direction of markets at lower cost than buying and trading individual stocks. The price of crude determines the underlying value for most energy companies. The 41-company S&P 500 Energy Sector Index tends to rise and fall with the oil price.

Investors withdrawals from energy ETFs so far this month include $806.8 million from the Energy Select SPDR Fund, the largest energy-stock ETF, which had swelled to a record $15 billion of market value May 1.

CUTTING BACK

“The hot money, the money that’s looking for short term trades, may have taken some of those gains,” Issakainen said. “I don’t make much more of it than people making tactical moves.”

Although withdrawals from energy ETFs have slowed in the past week, they haven’t stopped. More than $400 million was taken out of the sector in each of the first two weeks of May. Withdrawals over the past seven days were about $338 million.

Crude may fall back further, said Chris Johnson, a strategist at Macquarie Capital (USA) in New York. “The fundamentals for quite some time haven’t supported the price rise we’ve seen,” he said. “Uptick in demand has clearly not been in line with supply.”

U.S. crude inventories are near the highest in more than 20 years, according to the Energy Department.

ENERGY FUNDAMENTALS

Also weighing on the oil price is a stronger U.S. dollar, Johnson said. Because crude is priced in dollars, a relative decline in other currencies makes oil more expensive, curbing demand.

Those fundamentals make energy stocks “definitely an overbought trade, so people have started to move out of it,” Johnson said. “I’d expect that to continue in the coming weeks.”

Energy funds are worth $50.4 billion, trailing health care and real-estate funds. Only health-care ETFs have drawn more cash this year.

“ETF investors were early to the recovery trade,” said David Mazza, a strategist at State Street. Money poured into energy ETFs even as equity analysts cut earnings forecasts. Oil majors from BP Plc to Exxon Mobil to Total SA beat first- quarter estimates.

State Street’s Energy Select Sector SPDR had the most withdrawals of any sector-focused fund so far this month.

Also among the top 10 in withdrawals were SPDR S&P Oil & Gas Exploration ETF, which holds smaller companies focused on production, Market Vectors Oil Service ETF, focused on companies that provide drilling and production services such as Schlumberger and Halliburton, and the Blackrock iShares U.S. Energy ETF, according to data compiled by Bloomberg.

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