Hedge funds have recently begun to cover short positions in energy stocks, which has contributed to a rally in the sector. Despite the recent increase, net long exposure in crude oil remains relatively low, suggesting potential for further gains if additional upside catalysts emerge. Brent crude is nearing $80 per barrel as hedge funds reverse their bearish bets. The unwinding of large net short positions in several oil contracts has further fueled the rally. Charts from Goldman Sachs and Deutsche Bank indicate the technical setups and potential for further movement.