Short selling in U.S. energy sector surges as oil prices fall
Short selling in the S&P 500 energy sector rose in November to its highest level in years, outpacing that of the benchmark S&P 500 index as crude oil prices continued to tumble amid a global glut, according to Markit data.
On average, 5.5 percent of the shares in the S&P energy sector were on loan for the five weeks ended Dec. 3, compared with an average of 2.98 percent for the broader S&P 500 over the same period.
In the preceding five weeks through Oct. 29, about 5.2 percent of energy shares were on loan on average, against 3 percent for the S&P 500. In the five weeks ended Sept. 29, 5.1 percent of energy shares were on loan, versus the S&P’s 2.8 percent.
In comparison, energy sector shares on loan averaged 2.5 percent, compared with 2.1 percent for the broader S&P in roughly the same 15-week period late in 2014.
Before August 2014, the percentage of energy sector shares on loan trended lower than that of the S&P 500.
“There’s a growing number of people positioning for further pain in the energy sector,” said Markit analyst Simon Colvin, estimating that energy short sellers are now “the most eager” they have been in years. Markit’s data goes back to early 2012.