Warning of violent oil rally LONDON (Bloomberg) -- On the surface, the oil market is getting worse and worse: there are now more bearish bets on benchmark Brent crude than at any time in at least six years. But to many traders, that’s a signal prices are vulnerable to a sudden, sharp rebound.
Oil’s ripe for a so-called “short-covering” rally -- where traders who sold contracts hoping to benefit from falling prices buy them back to take profits or avoid losses. Short positions held by speculators in Brent rose to 169 million barrels last week, the highest since records started in 2011, according to exchange data.
“The market is vulnerable to a very violent short-covering move,” said Thibaut Remoundos, founder of Commodities Trading Corporation, which advises on hedging strategies."
https://www.worldoil.com/news/2017/6/28/oils-record-bearish-bets-prompt-warning-of-violent-rally