An oil trader once so revered by the industry that he was nicknamed “god” is closing his main hedge fund after suffering heavy losses.
Andy Hall, who shot to prominence after securing a $100 million bonus while he was the star trader at Citigroup, is said to be closing Astenbeck Master Commodities Fund II. The fund lost almost 30 per cent in June, sources told Bloomberg News.
Last month it emerged that Mr Hall, 66, had abandoned his long-term bullish stance on oil prices and had told investors that he expected prices to remain “range-bound for some time to come”, held firmly in place by the scale of American shale resources and efficiency savings reducing break-even prices.
The comments and fund closure are symbolic of a wider dramatic shift in expectations in the oil industry that has forced many senior figures to rethink their positions significantly over the past year.
Crude prices have remained low as efforts by the Opec cartel and other leading producers, such as Russia, to cut the global glut of oil by curbing their output have run up against resurgent production by US shale producers. Bob Dudley, BP’s chief executive, said on Tuesday that he, too, had abandoned his earlier belief that oil prices would rebound, in light of the responsiveness of American shale. Mr Dudley said that he now believed that prices would remain within the range of $45 to $55 a barrel for the foreseeable future, unless there were significant geopolitical shocks.
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In further evidence of the shift, a poll of investment banks published by The Wall Street Journal yesterday found that forecasts for average Brent crude prices for this year had been cut from $55 a month ago to $53 a barrel.
However, analysts at Jefferies, the broker, said that they remained “cautiously optimistic” after a rally in crude prices this week amid signs that increased supply from Libya was restricted “ in the near term due to limitations around effective export capacity”.
Astenbeck Capital did not respond to a request for comment.
