Hedge Funds Set Up for Mideast Standoff as Bullish Oil Bets Grow - Bloomberg

Hedge Funds Set Up for Mideast Standoff as Bullish Oil Bets Grow - Bloomberg:

Escalating tension in the Persian Gulf is beginning to justify renewed optimism that oil will rebound.

Money managers boosted their bets on rising crude prices by the most in four months as of July 16, according to data released Friday. That left them exposed to a 7.6% weekly price drop as, for four days, the market focused on a worsening outlook for demand and seemed indifferent to geopolitics.

But prices soared almost 2% on Friday with the U.S. saying it shot down an Iranian drone and Iran capturing two British-flagged tankers. Ian Bremmer, president and founder of Eurasia Group, a political risk research and consulting firm, is among experts saying futures could shoot up past $100 a barrel if a war breaks out.