Crude Oil Surges Past $83 as Trend Funds Bet Big on Inflation Data

Nymex US crude oil futures have broken through the $83.00 per barrel mark, currently trading at $83.04 per barrel, up 1.11% on the day.

Ahead of this week's US CPI release, trend funds have taken out massive short positions in global bonds, with a record amount of $400 billion at stake.

The stakes are high for these funds, as every 1 basis point change in the 10-year U.S. Treasury yield could lead to a profit or loss exposure of approximately $300 million for CTAs, according to UBS.

Bank of America warns that if the upcoming inflation data does not support a Fed rate hike in September, it could pose challenges to these crowded short positions, given their large size and underweight positions among active funds.