Crude oil prices are gaining ground after hedge funds capitulated and Russia says they favor extending production cuts. Hedge funds cut their net-long position by 7%, while shorts jumped by 37 percent. The funds that were long and survived the market collapse are now chasing the market lower. That might not be the best plan as oil inventories in the US are set to fall again.
Oil prices rebounded after some of the biggest names in the hedge fund world and private equity lost billions betting on a rebound in energy prices and distressed energy debt. What’s more, many of them are staying with it.