- Oil hedge funds expect a 51% loss as bets on energy prices tighten, according to Bloomberg.
- Pierre Andurand’s hedge fund has delivered exceptional returns to investors from 2020 to 2022.
- Earlier this year, Andurand gave a bullish outlook on oil prices, arguing that they could hit $140 a barrel.
A hedge fund managed by Pierre Andurin posted a staggering loss in the first half of 2023, with the flagship fund down 51% in the wake of this year’s fall in energy prices.
The Andurand Commodities Discretionary Fund has been making leveraged bets in the energy sector, down 7% in the first three weeks of June, according to a letter to investors. Bloomberg saw. The hedge fund may have lost about $750 million so far this year, based on reports that it managed about $1.5 billion in December 2022.
It’s unclear what kind of deal caused the huge losses, but it’s probably a bullish bet on oil, as Andurand had predicted earlier this year that oil prices could rise to $140 a barrel by the end of 2023. seems to be related to
“Assuming no more lockdowns, I think oil prices will rise above $140 a barrel when Asia fully reopens,” said Andurand, adding, “The market will see what that brings. We are underestimating the size of the demand stimulus,” he added.
Instead, oil prices have fallen steadily by about 12% this year, with WTI crude trading just under $71 a barrel on Friday. Commodity prices have been affected by cheap Russian crude oil flowing into global commodity markets, a slower-than-expected resumption of China’s economy, and high inventory levels.
Oil prices have fallen 46% since peaking at $130 a barrel shortly after Russia’s invasion of Ukraine in March 2022.
Andurand’s hedge fund’s sharp drop comes after it delivered exceptionally high returns to investors in 2020-2022. According to Bloomberg, the hedge fund is up 154%, 87% and 59% in 2020, 2021 and 2022 respectively. .