Andurand Capital – one of the largest and historically bullish hedge funds specializing in oil has just closed out the last of their long positions and is running at “a very reduced risk at the moment,” per Reuters, while crude oil prices have dropped to their lowest level since November – following reports of Libya’s return to the oil export market. Moreover, technicals suck per Citi’s Ed Morse. That said, Macron’s win in France seems to have woken up some oil spirits.
As oil began to crater in March and April, Pierre Andurand, considered one of the world’s best-known oil traders, remained “fundamentally bullish on oil,” resulting in a loss of 15.4% through April for his $1.5 billion fund. The loss was in stark contrast to 2016, when Andurand achieved a 22 percent return after nailing crude’s January slide and subsequent recovery, however he remained fervently bullish into 2017. Oil is down 17% YTD.
Just two weeks ago Andurand said he thought there was a rebound in sight despite the “choppy market,” betting that slowing production out of the Middle East and declining U.S. fuel inventories suggest prices should rise. In a letter to investors, he wrote:
“While the price action year-to-date has proven to be extremely frustrating, our bullish outlook for oil prices has not changed,” Andurand wrote. “We maintain the view that front month oil prices will reach new highs over the next few months as fundamentals improve considerably going into the summer.”
That’s all out the window as of yesterday…
Andurand throwing in the towel follows months of scrutiny after he quickly lost $130 million in the first part of 2017, before oil prices plunged. Ouch.
Want to try your hand at nailing the oil trade? Here’s a way to play via various ETFs:
$USO – United States Oil Fund
$OIL – iPath Crude Oil Total Return Index
$UCO – Proshares Ultra Bloomberg Crude Oil (2x)
$UWT – 3x long
$SCO – UltraShort (2x)
$DWT – 3x short
Complete list here.
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He is giving Ackman a run for his money in the latest Loser Sweeps. This could be a Buy signal and the start of a massive rally. As indicated, it was recently that the guy was a raging bull. He seems confused as hell.