• 5 minutes Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 11 minutes Saudi Fund Wants to Take Tesla Private?
  • 17 minutes Starvation, horror in Venezuela
  • 23 mins WTI @ 67.50, charts show $62.50 next
  • 7 hours Mike Shellman's musings on "Cartoon of the Week"
  • 2 hours Newspaper Editorials Across U.S. Rebuke Trump For Attacks On Press
  • 4 hours WTI @ 69.33 headed for $70s - $80s end of August
  • 6 hours Venezuela set to raise gasoline prices to international levels.
  • 6 hours Renewable Energy Could "Effectively Be Free" by 2030
  • 7 hours Scottish Battery ‘Breakthrough’ Could Charge Electric Cars In Seconds
  • 5 hours Corporations Are Buying More Renewables Than Ever
  • 3 hours Batteries Could Be a Small Dotcom-Style Bubble
  • 21 hours Oil prices---Tug of War: Sanctions vs. Trade War
  • 21 hours California Solar Mandate Based on False Facts
  • 10 hours Again Google: Brazil May Probe Google Over Its Cell Phone System
  • 10 hours Don't Expect Too Much: Despite a Soaring Economy, America's Annual Pay Increase Isn't Budging
Alt Text

Saudi Crackdown On Canada Could Backfire

The Saudi/Canadian spat that started…

Alt Text

Pakistan: Exxon Is Close To Making A Mega Oil Discovery

Pakistan’s Minister for Maritime and…

Alt Text

Goldman Sachs Expects “Very, Very Tight” Oil Market

Investment bank Goldman Sachs warns…

ZeroHedge

ZeroHedge

The leading economics blog online covering financial issues, geopolitics and trading.

More Info

Trending Discussions

“Oil God” Andy Hall Shuts Down Main Hedge Fund

oil

Back in December 2014, the start of the worst oil rout since the financial crisis claimed its first victim when 113 year old Phibro, then owned by Occidental Petroleum after its sale by Citigroup, liquidated in the U.S. after it failed to buy a buyer. Phibro, of course, was made famous or perhaps infamous (after his $100 million Citi bonus in 2008 prompted a Congressional inquiry) by its star employee, "oil god" Andy Hall. Yet while said god's employer Phibro, was liquidating and thus ending one of Hall's paychecks, Hall would continue managing his $3 billion hedge fund Astenbeck (of which Occidental owns 20 percent) where he worked in parallel.

At the time we wondered how long this oil permabull - who suffered tremendous losses in the ensuing two years - would last in an environment where oil prices refused to go up, and whether he "would blow up twice on the same trade." Turns out the answers, in reverse order, were "yes" and "about 2 and a half years", because moments ago Bloomberg reported that Hall is shuttering his main Astenbeck hedge fund:

- Oil trader Andy Hall is said to close main Astenbeck hedge fund

- Astenbeck master commodities fun II is said to lose 30 percent in 1H

As Bloomberg adds, Hall is closing down his main hedge fund "after large losses in the first half of the year" which amounted to almost 30 percent through June for his flagship Astenbeck Commodities Fund II.

Hall's liquidation comes less than three months after another famous oil bull, Pierre Andurand, liquidated his last remaining long positions, although it was unclear if he had also shuttered his hedge fund.



Ironically, it was less than a month ago that Andy Hall finally capitulated, admitting that the "facts changed", and warning that oil may not go up much from current prices in what was his bearish letter ever (full letter can be found here). This is what Hall concluded in his latest letter to investors:

Whereas it once seemed positions could be held with an eye to a longer-term secular appreciation, that is no longer the case. Indeed, the evidence is now in plain sight. Related: Barclays: Oil Prices To Drop This Quarter

Over the past year, the front month WTI futures contract has moved by double digits in percentage terms 10 times within a $40 - $55 band. This volatility has been accentuated by large financial flows into and out of the market by non-traditional investors and algorithmic trading systems. Attempting to capture just a percentage of those moves makes more sense than trying to ride what has turned out to be a non-existent trend, especially when contango inflicts a negative roll return on investors. The extreme volatility within a rangebound environment also argues for a more tactical and conservative approach to portfolio management.

Upon reading this, and seeing little further upside from their former "oil god", it appears that Hall's LPs decided they had had enough, and pulled their cash.

Oil, sending imminent liquidation, is down on the news.



By Zerohedge.com

More Top Reads From Oilprice.com:




Back to homepage

Trending Discussions


Leave a comment
  • Citizen Oil on August 05 2017 said:
    There is no such thing as an oil God. The guy got lucky in 2008 and rode the wave. He didn't see the 2014 trend coming and assumed it was 2008 all over again. Until investors stop throwing money at these producers that are constantly losing money we are going to be under $ 50. I see some signs of it now, but you never know. Fracking has destroyed the NG market for the last 9 years, but oil is more of a global commodity so it's hard to tell they'll do the same for Texas tea.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News