Tuesday, October 13, 2015

Oil: Astenbeck Capital's Andy Hall Is Long, Wrong and Down 20% Year-to-Date

From the Wall Street Journal:

Oil Bull Andrew Hall Stands His Ground
Main fund at Astenbeck Capital is on track for its worst year since its inception in 2008
Andrew Hall’s faith in an oil-market rebound isn’t shaken, but it isn’t paying off, either.

The main fund at Mr. Hall’s Astenbeck Capital Management LLC lost 7% in September, according to investor documents reviewed by The Wall Street Journal, leaving it down 20% for 2015 as of Oct. 1 and on track for its worst year since its inception in 2008.

The decline is noteworthy because Mr. Hall is one of the most visible traders left standing who is betting that oil prices will soar. U.S.-traded crude slumped $2.53, or 5.1%, to settle at $47.10 a barrel on Monday, its largest decline since Sept. 1 and down 12% in 2015. On Tuesday prices remained volatile.

He has emphasized in letters to investors that low prices are spurring strong growth in oil demand. He points to the jump in U.S. sales of sport-utility vehicles and a rise in the number of miles driven nationwide. The world could experience a “sizable” deficit of supply by the second half of 2016 that could drive prices higher, he said in a September letter to investors. He didn’t specify what price he believes oil will return to or when it would happen.

A veteran of the oil markets, Mr. Hall is best known for earning a roughly $100 million bonus in 2008 while at Citigroup Inc., after a run of 16 straight profitable years. Astenbeck has posted a 21% cumulative return since 2008, compared with a 64% decline in the S&P GSCI commodity index and a 61% rise in the S&P 500.

Since January 2013, however, his fund has shrunk to $2.6 billion from $4.8 billion thanks to losses and redemptions. His bullish viewpoint puts him at odds with the many Wall Street analysts and industry observers who expect a global energy glut to keep prices low, which could amplify the pressure on Mr. Hall if his bets continue to misfire....MORE
HT: ZeroHedge

Previously on Action-with-Andy:
Aug 10
Despite Losing 17% In July, Astenbeck Capital 's Andy Hall Maintains Higher Oil Prices Are Right Around The Corner
Feb. 9
Astenbeck Capital's Andrew Hall: Oil Is Going To $65 And The Surviving Shale Plays Will Do Just Fine
Feb. 6
UPDATED--Astenbeck Capital's Andrew Hall "See's $40 Oil ‘Absolute Price Floor’"
Oct. 12
Former Oil Guru Andrew Hall Is In Cash 
Sept. 2014 
Oil: Former Phibro Guru Andy Hall Bets Against Shale, Buys Long-dated Futures
$100 Million Oil Trader Andy Hall: Maybe He Wasn't As Good As Advertised
How Some of the Biggest Funds in Oil Trading Got Wrong-footed By the Widening Brent-WTI Spread
Phibro Superstar Andrew Hall’s Commodity Hedge Fund, Austenback Down 10% YTD
The Last Word On Oil Trader Andy Hall and Life On the Right Hand Side of the Distribution
Occidental buys Citi firm Phibro for $250 million (OXY)

Here's the Journal's accompanying graphic:
Remember, oil futures are a two way market, you are allowed to short the wee beasties.

Regarding the headline, rather than the Journal's two-beat "Long and Wrong" we went with a modified Lady Caroline Lamb who said of Lord Byron: He is "Mad, Bad, and Dangerous to Know".