Hedge Fund Short Covering Probably Accounts for Recent Rally
Crude has rallied a bit over the last two weeks. Hedge funds and other money managers accumulated the equivalent of 374 million barrels of short positions by August 2, 2016 in WTI and Brent. There has been comparatively little change in hedge fund long positions over the same period. This has left oil prices vulnerable to sharp reversal if prices stop sliding or hedge funds try to lock in some of the profit.