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Legendary oil trader Andy Hall, who was nicknamed oil ‘God’ for profitably predicting a bull run in oil prices in the past, told Bloomberg TV on Thursday that oil prices would rise from current levels, as they may have hit the bottom after plunging by 30 percent in just two months.
“I think with prices hovering around or a little over $50 a barrel, I think you would have to have a pretty negative outlook on the global economy to believe that prices will continue their downward trajectory,” Hall told Bloomberg TV in an interview, noting that he doesn’t see a global recession soon.
Moreover, a slump in oil prices like the one we’ve seen over the past two months typically slows down supply growth while boosting demand, if there isn’t a global economic slowdown.
Lower prices will undoubtedly impact U.S. production growth, Hall said, but added that the surge in American oil production above expectations has been the biggest surprise this year.
In the weeks leading up to the OPEC+ meeting in Vienna, Hall was one of the analysts expecting an OPEC-assisted rebound in prices.
“The balance of risk at this point favors some sort of recovery,” Hall said in an interview with Bloomberg in November, two weeks before OPEC and its Russia-led non-OPEC partners decided to cut a total of 1.2 million bpd of oil production for six month beginning in January, with an option to review the agreement in April.
Before the new OPEC+ deal, the stronger U.S. dollar against emerging-market currencies and concerns over the U.S.-China trade war were weighing on demand, while inventories were rising, according to Hall.
Hall, the oil trader who had bet on higher oil prices for more than a decade, 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.
“In short, Opec, the market and oil bulls have run out of runway,” Hall said in a letter to investors seen by the Financial Times in July 2017.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.