Traders Are Shorting Oil As If The Hormuz Crisis Is Over

In yet another sign that the paper oil market may be too complacent about the magnitude of the supply disruption in the Middle East, trades have been boosting their short positions in oil futures for most of the past two months. Since the beginning of April, portfolio managers have been increasingly betting that oil prices would fall, according to the latest available commitment of traders (COT) data from exchanges as of June 2. Shorts on Brent Crude tripled between the end of March and the beginning of June, per the data compiled by energy analyst…