Many short sellers backed away from mega-oil and large energy-related companies in the two-week period that ended March 15. The retreat was led by a drop in shares sold short in Exxon Mobil Corp. (NYSE: XOM), the world’s largest energy company, which declined 5.5 million, or 11%, to 46.4 million. Exxon’s share price has recovered somewhat from a brutal sell-off and is up nearly 8% so far this year to $84.

The action makes sense, based on the recovery of oil prices, which have risen from less than $29 to over $40 in two months. Ironically, perhaps, much of the recent gain has been attributed to short covering.

Following suit, short sellers in Conoco Philips (NYSE: COP) dropped their positions by 9.3 million, or 26%, to 26.1 million.

Even troubled Petróleo Brasileiro S.A. (NYSE: PBR) shed some short sellers. Petrobras shares sold short shrank by 11 million to 128 million. It was the ninth most shorted stock traded on the New York Stock Exchange, based on share volume, for the most recent period.

In eighth place, energy services company Transocean Ltd. (NYSE: RIG) saw short interest stabilize, down just 1% to 129.4 million. It has been as deeply hurt financially as the industry it serves. Shares short in its primary rival, Schlumberger Ltd. (NYSE: SLB), dropped 4.2 million shares to 53.1 million.

Short interest in Kinder Morgan Inc. (NYSE: KMI) fell 6.2% to just over 64 million shares, which is 3.4% of the company’s float. The stock is the 25th most-shorted stock on the New York Stock Exchange.

Marathon Oil Corp. (NYSE: MRO) issued 145 million new shares in early March, raising $1.1 billion, and the stock price jumped. Short interest in Marathon dropped nearly 28%.

Oilfield services provider Noble Corp. PLC (NYSE: NE) saw short interest drop by nearly 12% after repurchasing some $200 million in senior notes in early March, cutting annual interest payments by an estimated $10 million (three cents per share in earnings).

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