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Biggest Oil Stock ETF Sees Short Sellers Unwind Bets After Rout

  • Short positions in Energy Select fund drop 14%, S3 says
  • Seen as a sign that traders now ‘looking for a bottom’
A pumpjack extracts crude oil from active oil wells at the Synergy Oil Field in Seal Beach, California.

A pumpjack extracts crude oil from active oil wells at the Synergy Oil Field in Seal Beach, California.

Photographer: Bing Guan/Bloomberg

Money managers rolled back bets against the biggest exchange-traded fund focused on oil-company stocks, signaling speculation that the price of crude is at least temporarily bottoming out after sliding sharply since last month.

Short sellers piled on to the $33 billion Energy Select Sector SPDR Fund (ticker XLE),  the biggest ETF focused on large-cap U.S. energy stocks, as it rose along with the price of oil. But after the energy rally reversed, delivering profits to those betting against the ETF, traders closed out positions, cutting the number of shares sold short by 14% over the past 30 days, according to data compiled by S3 Partners