Hedge funds slashed short positions in West Texas Intermediate by 13 percent in the week ended Sept. 1 as the largest three-day rally in 25 years sent crude up by almost $10 a barrel before it dropped again. It was the biggest liquidation of bearish bets since May.
“We’re seeing some short covering along with long liquidation, which means that money is moving out of the market,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York, said. “Investors are moving to the sidelines, which is an appropriate response given the volatility.”
Crude has declined 51 percent in the past year as rising output from the U.S. and the Organization of Petroleum Exporting Countries outpaced demand growth. Prices will remain at $40 to $60 a barrel into 2016, said Ian Taylor, chief executive officer of Vitol Group BV, the world’s largest independent oil trader.
Crude has declined 51 percent in the past year as rising output from the U.S. and the Organization of Petroleum Exporting Countries outpaced demand growth. Prices will remain at $40 to $60 a barrel into 2016, said Ian Taylor, chief executive officer of Vitol Group BV, the world’s largest independent oil trader.
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