Wednesday, December 9, 2015

Not As Good as Advertised: Losses For Former Oil Guru Andy Hall Deepen

In trading it is crucial to retain agility of mind and enough self-awareness to understand you are dealing with forces greater than yourself, puny human.
When you start screaming into the wind that the market is wrong, you've lost. The market is what it is.

Front month futures $37.26 down 25 cents after trading as high as $38.99. Volume is quite large, 570,168 January contracts.

Lifted in toto from the Wall Street Journal, December 8:

Astenbeck loses 9.7% in November, assets under management down
Astenbeck Capital Management LLC, a hedge-fund firm run by oil trader Andrew Hall, lost 9.7% in November, bringing 2015 losses to more than 26%, according to an investor letter reviewed by The Wall Street Journal.

Astenbeck’s assets under management fell to $2.4 billion, down from $3 billion at the start of the year and nearly $5 billion less than three years ago.

The fund is on track for its worst year since its inception in 2008.

Mr. Hall has remained bullish on oil throughout the deep downturn in the crude market this year and last.

In a letter to clients dated Dec. 1, Mr. Hall showed no sign of altering his views on the market. Throughout crude’s 30% fall this year, he has continued to cite data points that suggest a turnaround in prices soon.

Oil companies’ hedges, used to lock in prices, are beginning to expire, Mr. Hall noted in his letter. By next year, most companies will be fully exposed to low prices, with oil futures trading at nearly seven-year lows and the U.S. benchmark contract around $37 a barrel on Tuesday.

”The longer term story regarding oil remains very much intact,” Mr. Hall wrote. “Indeed the longer prices remain at current levels, the more powerful the ultimate recovery will likely be. The oil industry simply cannot function with oil prices stuck at current levels. 
”Now is not the time to exit the market,” Mr. Hall added.

A representative for the firm didn't respond to a request for comment.
That of course raises the question: "When was the time to exit the market?"

Here's today's action via FinViz:

And our last post on Mr. Hall which has a lot of the recent history, November 5's:
Oil--Astenbeck Capital's Andrew Hall Says Production Data Doesn’t Suggest Surplus
We have had some success betting against Mr. Hall for the last few years but are aware that one of these days he's going to be right. Not just yet though.Front month futures $45.76, down 56 cents....
There's that self awareness. And some situational awareness.

Oct. 13 
Oil: Astenbeck Capital's Andy Hall Is Long, Wrong and Down 20% Year-to-Date
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)