Andy Hall, The Oil Trader Known as ‘God’, Is Closing Down His Main Hedge Fund

God doesn’t know everything, apparently. It is surprising mistakes by experts, like this that could crash the world economy. When oil is priced below $50 /barrel, it means that either there is too much supply or too little demand. Whenever an “expert” tells you that it is the former, you can expect it is probably equally likely to be the latter.

Since oil is the life-blood of industry, (think transportation of raw materials, and finished goods), this means that industry is in a bad way. No one wants to say it because they never want to talk down expectations and be the one responsible for crashing the markets. So instead they say it is an over-supply problem and that prices will rise soon. Do that for long enough, two and a half years, and you go bust.

https://www.bloomberg.com/news/articles/2017-08-03/oil-trader-andy-hall-is-said-to-close-main-astenbeck-hedge-fund

The Oil Trader Known as ‘God’ Is Closing Down His Main Hedge Fund


By Nishant Kumar, Javier Blas, and Suzy Waite
4 August 2017

Andy Hall, the oil trader sometimes known in markets as “God,” is closing down his main hedge fund after big losses in the first half of the year, according to people with knowledge of the matter.

The capitulation of one of the best-known figures in the commodities industry comes after muted oil prices wrong-footed traders from Goldman Sachs Group Inc. to BP Plc’s in-house trading unit. Hall’s flagship Astenbeck Master Commodities Fund II lost almost 30 percent through June, a separate person with knowledge of the matter said, asking not to be identified because the details are private.

“I’m shocked,” said Danilo Onorino, a portfolio manager at Dogma Capital SA in Lugano, Switzerland. “This is the end of an era. He’s one of the top oil traders ever.”

Hall shot to fame during the global financial crisis when Citigroup Inc. revealed that, in a single year, he pocketed $100 million trading oil for the U.S. bank. His career stretches back to the 1970s and includes stints at BP and legendary trading house Phibro Energy Inc., where he was chief executive officer.

“Andy Hall is one of the grandees of oil trading,” said Jorge Montepeque, a senior vice president of trading at Italian energy major Eni SpA.

A representative of Astenbeck Capital Management LLC declined to comment. The Southport, Connecticut-based company managed $1.4 billion at the end of last year, according to a Securities and Exchange Commission filing.

Hall is the latest high-profile commodity hedge-fund manager to succumb to the industry’s low volatility and lack of trending markets. At least 10 asset managers in natural resources have closed since 2012, including Clive Capital LLP and Centaurus Energy LP. Goldman Sachs reported its worst-ever result trading commodities in the second quarter.

Oil hedge funds such as Astenbeck wagered earlier this year that production cuts led by Saudi Arabia and Russia would send prices climbing. Yet, their bets backfired as U.S. shale producers boosted output and Libya and Nigeria recovered from outages caused by domestic disturbances and civil war.

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