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A former Millennium Management partner has launched a new oil-focused hedge fund, which is a rare occurrence at a time when a lot of commodity funds have been closing shop, including Andy Hall’s Astenbeck Master Commodities Fund II, which closed last year.
Bloomberg reports that Andrew Dodson, a descendant of Oscar Philipp from the famous Philipp Brothers commodities fund, incorporated Philipp Advisors in April in London, and is eyeing US$500 million in assets with trading due to start in the summer.
According to Dodson, the time is ripe for a new player in the oil hedge fund field. "The opportunity is the most interesting it has been, and the number of fund participants the smallest it has been, for a long time," he said as quoted by Bloomberg.
Oil markets are certainly anything but boring right now. Most analysts seem to expect that president Trump will shun whatever revised version of the Iran nuclear deal his European counterparts offer him, which could remove as much as a million barrels of crude daily from global markets, pushing oil prices even higher.
In fact, one analyst told CNBC that there is no hope for the Iran deal to remain in place, and Brent could hit US$80 when Trump makes the official announcement. "A knee-jerk reaction can be expected whenever a formal announcement is made. After all, market participants will not want to miss the boat for a new era of Iranian sanctions," Steven Brennock from PVM Oil Associates told CNBC, adding that this reaction could push Brent to US$80.
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Meanwhile, Venezuela’s oil production is continuing its inexorable slide, with the country’s oil ministry forecasting that it could fall by another 200,000 bpd by the end of the year to 1.2 million bpd.
All this is very bullish for prices, but the uncertainty remains, spicing things up on the trading front. U.S. production is growing, and Russia in April missed its OPEC+ production targets for the second month in a row. Some analysts have argued that OPEC members will be tempted to start cheating in the current environment, which would lead to a price correction.
Also, the possibility of Trump agreeing to keep the Iran deal in place, tiny though it may be, is a possibility nevertheless: after all, the president recently complained about excessively high oil prices.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.