Changes afoot in more ways that internal machinations at SSN
http://www.marketwatch.com/story/wh...d=MW_story_recommended_default&Link=obnetwork
Therefore, when turning points come, the short sellers who piled in together also cover their positions in unison, and that causes large face-value increases like what happened on Wednesday.
Were there associated negative news events over the past week or so that caused short sellers to pile in — of course, there were (inventories) — and was there a positive event on Wednesday that prompted short covering — of course there was (build was less than expected) — but that's not the point of this column.
The point is that the short sellers in oil are not like short sellers in stocks whose businesses are deteriorating. As much as they love to pile on, short sellers in oil are easy to entice to the other side because they ultimately know that the price of oil cannot and will not stay down for very long.
In fact, on the heels of the notion that oil prices may have bottomed, not only will short sellers cover aggressively, but buyers will come out of the woodwork because almost everyone knows oil prices need to increase in order to match production costs, even in OPEC countries.
For example: If Russia and OPEC decided to cut production in unison, WTI and Brent would fly. In my opinion, that day, or a day like that, is coming
