Legendary oil trader Andy Hall is happy to be out of the oil market, which he sees as a ‘broken’ commodity on the road to demise in the long term.
Hall, who was nicknamed ‘God’ for profitably predicting oil prices in the past, has been out of the oil trading business for more than two years, and he doesn’t have any plans to return because he sees oil as a commodity with an existential problem, Hall told Bloomberg in a phone interview.
The legendary oil trader had bet on higher oil prices for more than a decade, and he continued to hold his bullish view even after the 2014 oil price crash. But in the summer of 2017, he closed his main fund Astenbeck after the fund posted double-digit losses. For some time, Hall has expressed bearish views on oil, saying that oil demand will peak by 2030 due to the advance of renewables and electric vehicles (EVs).
With oil prices crashing to multi-year lows, Hall now told Bloomberg:
“Oil is a broken commodity that’s in long-term decline.”
Oil prices tumbled to 18-year lows earlier this week as the market is being hit by a double shock—surging supply and plunging demand. While the coronavirus pandemic is destroying demand, Saudi Arabia is preparing to flood the market with oil in April, intent to punish Russia for refusing to back deeper OPEC+ production cuts earlier this month. Russia is not backing down either and is also promising to increase production as of April 1.
“Now with this crisis, demand has been decimated in the short term and that’s just adding to the longer-term problem,” retired trader Hall told Bloomberg, noting that his view of the existential problem of the crude oil commodity made him get out of it.
“Could oil prices double from here? Easily, but it won’t stay there,” Hall told Bloomberg.
By Tsvetana Paraskova for Oilprice.com
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