Oil trader Pierre Andurand is banking on a resurgence in crude prices to bounce back from his hedge fund’s worst performance as his bullish bets on the commodity start to pay off.
Its main Andurand Commodities Discretionary Enhanced fund has made money over the past two months and pared annual losses to 15% through Sept. 16, according to people with knowledge of the matter, who asked not to be identified because details are private. The fund was down more than 50% at the start of the year, before paring losses to 35% after a strong July.
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course
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2023
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2022
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2021
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2020
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2019
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Come back
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-15%*
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59%
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87%
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154%
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-15%
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*Until September 16
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A representative for Andurand Capital Management, which managed $1.3 billion as of the end of July, declined to comment.
While prices are still well below their prediction earlier this year of oil rising above $140 a barrel by the end of 2023, the commodity has climbed above $90 in London and New York for the first time this year as global markets have been tightened by record demand and tight supply. Global consumption has risen to an all-time high of 103 million barrels a day, while Saudi Arabia and Russia, leaders of the OPEC+ cartel, have cut supplies to boost prices.
“Simply put, the Saudis are walking,” Andurand told clients in his latest investor letter seen by Bloomberg.
He forecast that global oil inventories will continue to fall in the coming months, supporting prices until they are high enough to trigger a supply response from OPEC+. Andurand predicted that a level north of $100 a barrel for Brent could induce that response.
“We remain positioned long crude oil futures and have been increasing downside as recent inventory draws add to our conviction of an underserved market,” he added.
His bullish calls were met with commodity falls earlier this year, leading to a rollercoaster ride for his fund, which widens its bets with borrowed money and trades with no set limits on the amount of risks you take The fund had increased its clients’ invested capital more than seven times over the previous three years before hitting a rough patch in 2023.
–With help from Grant Smith.
