But at some point these funds will have to buy back a good proportion of their short positions to book the profits. When they do, U.S. crude prices are likely to rise substantially.
Experience shows the accumulation and liquidation of both long and short positions in WTI by hedge funds is cyclical and closely correlated with the rise and fall in prices (http://link.reuters.com/fyn45w).
The question is when and at what price the funds start to buy back their short positions, and whether the trigger is fundamental news or a change in sentiment/strategy.