Front month futures $45.76, down 56 cents.
* Astenbeck up 2.5 pct in Oct, narrows year-to-date loss to 18 pct* Hall admits oil stocks "high", but says market underpriced (New throughout, adds Hall's comments from investor letter and background)
Renowned oil bull Andy Hall has acknowledged the reality of high and growing U.S. crude stockpiles but insists the market is still underpriced, as his hedge fund posted a slight gain in October from higher crude prices.
Hall's Astenbeck Capital Management in Southport, Connecticut, gained 2.5 percent last month, matching October's gains in benchmark Brent crude, performance data sent to Astenbeck investors and seen by Reuters on Wednesday showed.
Astenbeck is now down 18 percent through October, after losses in six out of 10 months, the data showed. Assets under management were at $2.6 billion, versus nearly $3 billion in January.
In a letter accompanying the performance data, Hall alluded to market concerns about the oversupply in oil.And from BOE report-the source of the headline:
"Oil prices continue to be volatile - buffeted by opposing forces," he wrote. "On the one hand there is a growing realization that current prices are not sustainable. But on the other there is the reality of high and - for now at least - still growing inventories."
U.S. crude inventories rose last week for the sixth consecutive week, the government said on Wednesday, despite imports dropping to 1991 lows.
Hall argued that the stockpile situation would not last.
He called oil bears "Cassandras" whose pessimistic outlook suggests that stocks of distillates including diesel would outgrow storage capacity, causing refineries to reduce processing and prices to collapse.
"We think such a scenario is highly unlikely," Hall wrote. "Whilst localized dislocations are certainly possible, there is no general shortage of storage capacity globally for either crude oil or oil products....MORE
Andy Hall, one of the best-known oil traders who’s been bullish on prices, said oil inventory data doesn’t indicate a surplus in the crude market and prices are set to rise.
“We think the degree of negativity is unwarranted,” Hall, who runs $2.6 billion hedge fund Astenbeck Capital Management, said on Wednesday at the Invest for Kids conference in Chicago.
Previously on the Andy Hall channel:Hall cited supply constraints among OPEC members, saying Saudi Arabia is producing close to capacity while Iraq is struggling to maintain output. He said he expects rig counts to continue declining....MORE
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Here's the graphic accompanying the Journal's Oct. 13 piece:
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".