Bearish Wagers on Petrobras Plunge Before Surprise Loss

Bearish wagers on Petroleo Brasileiro SA, the oil producer embroiled in Brazil’s largest graft scandal, receded before the report of a record loss amid unprecedented writedowns. Short interest in its American depositary receipts was at an eight-month low of 11.4 percent of shares outstanding on Monday, according to data compiled by London-based Markit Ltd. and Bloomberg. “Investors bought Petrobras, betting on a change in government,” said Pedro Paulo Silveira, the chief economist at brokerage Nova Futura in Sao Paulo. “They just forgot to check the real situation, which remains very dire.”

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