Abu Dhabi, UAEMonday 20 May 2019

Bullish oil fund manager Andurand posts 15% loss in July

Andurand Capital Management manages about $1 billion in assets and has been positive every year since its launch in 2013

An oil tanker is seen anchored off Marseille, France. According to fund manager Pierre Andurand a weak oil market is also due to lower Chinese demand. REUTERS
An oil tanker is seen anchored off Marseille, France. According to fund manager Pierre Andurand a weak oil market is also due to lower Chinese demand. REUTERS

Pierre Andurand, one of the most bullish oil investors, lost 15.2 per cent in July after markets sold-off, bringing his eponymous hedge fund into the red for the year, according to people familiar with the matter.

After the July loss, the oil-focused Andurand Capital Management fund was down 5 per cent through the first seven months of the year, the same people said, asking not to be named discussing private data. The losses came as global oil benchmarks suffered their biggest monthly drop since 2016.

The energy market was wrong-footed after Saudi Arabia, under pressure from US President Donald Trump to lower fuel prices, pushed Opec in late June to boost oil production. Riyadh actually preempted the meeting, already boosting output significantly through the month, sending prices down in July.

West Texas Intermediate, the US benchmark, fell 7.3 per cent in July. Other oil gauges also moved sharply. The price spread between WTI and Brent narrowed from late June to mid-July and time-spreads also gyrated.

In late July, Mr Andurand took to Twitter to say that the “weak oil physical market” wasn’t just due to Saudi Arabia and other Opec nations boosting output, but mostly because China was buying less crude. “Their low imports are not sustainable,” he wrote.

The losses are a rare setback for Mr Andurand, who made a name for himself by calling past gains and losses in the oil market largely right. Last year, his fund delivered a 2.2 per cent return net of fees, bucking losses that hit others. Legendary trader Andy Hall shut his flagship Astenbeck Master Commodities Fund II in August 2017 after it lost almost 30 per cent of its value in the first half, while Jamison Capital Partners shut its commodities fund earlier this year.

Mr Andurand, who manages about $1 billion in assets, launched his hedge fund in 2013 and has been positive every year since, including record annual returns of 38 per cent in 2014, net of fees, when oil markets plunged.


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The prominent hedge fund manager has been consistently bullish in recent months. In a series of tweets online earlier this year, he warned that current reluctance of energy companies to invest in new long-term production meant that $300 barrel oil was "not impossible" within a few years. He later deleted those posts.

Other oil-focused hedge funds include David D’Alessandro’s CMDTY Capital Management, BBL Commodities, run by Jonathan Goldberg, and Taimur Hassan’s Frere Hall Capital Management.

A spokesman for Andurand Capital Management declined to comment.

Updated: August 17, 2018 05:50 PM