NEW YORK (Bloomberg) -- Harvey’s got hedge funds caught in a whirlwind.

Just after the storm triggered the biggest rush to a more bearish stance on West Texas Intermediate crude since 2007, they flipped the switch and raised bets on a rebound as refiners in Texas whip plants back into shape.

Short-sellers saw “an advantage to be gained from the impact on refineries, but when it turned out it was going to be very short-lived, they made their way to the exits,” Gene McGillian, a market research manager at Tradition Energy in Stamford, Conn., said by telephone.

Harvey led fuel producers to shut down more than 20% of American refining capacity as it made landfall on Aug. 25, causing a sudden slump in crude demand and prices. But several refiners such as Valero Energy Corp., Citgo Petroleum Corp. and Marathon Petroleum Corp. got plants back on their feet in just a few days, stoking a post-Harvey rally. Some, like Phillips 66’s Sweeny and Exxon Mobil Corp.’s Beaumont, are taking a little longer.

Hedge funds increased their WTI net-long  position -- the difference between bets on a price increase and wagers on a drop -- by 15% to 169,985 futures and options in the week ended Sept. 5, U.S. Commodity Futures Trading Commission data show. Shorts declined by 7.3%, the most in six weeks, while  longs rose by 3.3%.

A week earlier, as Harvey’s torrential rains flooded southern Texas, the net-long position plunged 42%, the most since 2007.

Quick buck

“You can afford, as a speculative investor, to get a little bit more bullish,” with crude trading below $46/bbl during the CFTC report week, Tamar Essner, an energy analyst at Nasdaq Inc. in New York, said by telephone. “The storm certainly was bearish for WTI, but not for the long term, so why not make a quick buck?”

The U.S. oil benchmark traded up 0.8% at $47.85/bbl on Monday as of 10:22 a.m. London time.

Now the focus has turned to Hurricane Irma, but there are still question marks around how it will affect crude demand. It isn’t seen as wreaking as much havoc on the oil market as Harvey.

“Harvey was a big deal for the energy industry; it disrupted refining operations and it also disrupted imports,” Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, said by telephone. “This one will be much more typical. It won’t have the same effect as Harvey did on energy.”

Money managers increased their net-long position on benchmark U.S. gasoline by 79% to 65,680, the highest level in more than three years. During the report week, gasoline prices rose to a two-year high. The net-bullish position on diesel also advanced.

“You want speculators to drive up the price of gasoline to encourage refiners around the world to supply it,” O’Grady said. “You want to tell refiners not only in the United States, but also in Europe and Canada: if you can make it and get it here, we’re going to pay you for it.”