The stream of new product launches continued today with United States Short Oil Fund (DNO) on NYSE/Arca. This product’s goal is to deliver a return inverse to that of near-term crude oil futures.

DNO is actually not an ETF; it is a limited partnership registered with the Commodity Futures Trading Commission as a commodity pool. However, it will function very much like an ETF.

The sponsor of DNO is United States Commodity Funds, which now has six active energy-related funds covering crude oil (USO and USL), natural gas (UNG), heating oil (UHN) and gasoline (UGA). DNO is the company’s first inverse product.

Now may seem like not such a good time to introduce another commodity-based product, given the recent regulatory confusion. Moreover, DNO’s use of exchange-traded futures contracts means there could be a cap on its asset size. The sponsors may be calculating that they can operate the fund profitably at a lower size.

DNO is not the first inverse oil product. PowerShares DB Crude Oil Short ETN (SZO) began trading in June 2008. Additionally, there are two leveraged inverse crude oil products: PowerShares DB Crude Oil Double Short ETN (DTO) and ProShares UltraShort DJ-UBS Crude Oil (SCO). The intricacies of tracking energy futures, swaps and other derivatives means that DNO could have considerably different results than the existing products, even after adjusting for leverage.