Oil Short-Sellers Make Wrong-Way Bet as China Blindsides Market - Bloomberg:
It’s getting tougher to bet on oil in the age of Trump trade tweets and Chinese retaliation, with hedge funds getting it wrong for a seventh time in nine weeks.
This time around, short-sellers made their biggest retreat in a year in the week ended Aug. 20, slashing by 25% their wagers that West Texas Intermediate crude would decline, data released Friday show. That made sense as the U.S. had just delayed sanctions against Huawei Technologies Co., offering a rare hint of progress in the trade spat that has dogged the market.
Then on Friday, optimism unraveled as China announced tariffs on U.S. oil for the first time, sending futures plunging and wiping out all of the week’s gains. The whipsawing has plagued the market all year, but it seems to be getting more unpredictable. Before the last week of June, hedge funds got the direction of crude wrong just seven times in six months.
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