that is some amazing confidence. 2 years of unwavering bullishness. i might be an idiot but i feel his arguments were rather simplistic. but one can't have a x00mm net worth simply by being a mad & blind bull in 2013-2014 ... right ? In the permian they can break even at 30 or even 25 for some. at 50 they make great money. liquidity is bountiful with houston/texas/dallas PE firms streamlining easy money to whoever manages to hedge out 1/2/3 years. Plenty of skillful west texans to manage these businesses. Acreage pricing is raising like there is no tomorrow. I studied the model for oil which the IMF uses (and i suspect a lot of institutions have a very similar one). It does indeed predict oil in 60+ range by any variation of parameters but the betas it uses(supply elasticity) has no grasp on the nimble production that we have today in West texas. 2 ways for OPEC&Co. rates normalize and money tightens enough to raise the BE in the permian learn to live with 30bucks oil which would actually allow them to gain back marketshare.
I can copy and paste too. To quote Andy Hall this summer: “Whereas it once seemed positions could be held with an eye to a longer term secular appreciation, that is no longer the case.” Mr Hall said his fund would now take a more “opportunistic” approach to trading, abandoning his long-term bullish positions in favour of a more tactical short-term approach.
Well, the announcement that he's shutting down the fund after a 30% YTD loss also came this summer. It would seem that the switch to a more "opportunistic" approach may have come too late.
Well, I'm sure he became more tactical before this summer. That was just when he was quoted. Anyway, it's obvious simply being long is not what did him in. Oil was just above 50 to start the year and it's a tad below that now. Not really a good way to explain losing 30%. The front end of the curve got lit up though. That WOULD explain some of the losses if that is indeed what happened.
And now he blames algo traders ...LOL. https://www.bloomberg.com/news/arti...oodbye-to-oil-market-citing-worsening-outlook
He was short from the highs in 2013 all the way to the lows. Was also short from the highs in 2008 to the lows in 2009.
https://www.ft.com/content/2bcb2dfc-7d14-11e7-9108-edda0bcbc928 Andurand hedge fund’s $100 oil bet stands out from the herd Please use the sharing tools found via the email icon at the top of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found here. https://www.ft.com/content/2bcb2dfc-7d14-11e7-9108-edda0bcbc928 August 10, 2017 by: David Sheppard, Energy Markets Editor Hedge fund manager Pierre Andurand’s bet that oil will return to $100 a barrel has caught the attention of an industry more accustomed to energy executives warning they must prepare their companies to survive with prices less than half that level. It is a call that pitches the French-born trader against some of the biggest trends that have come to dominate the oil market outlook, from the US shale oil revolution to the rise of electric cars, which have led the majority of investors to believe oil prices will be capped near $50 for the foreseeable future. So far this year, Mr Andurand is nursing losses, with his fund having dropped 15 per cent. But his record of bold bets paying off — Andurand has returned investors in his eponymous $1.1bn fund a cumulative 560 per cent since 2008 — means it could be foolish to dismiss outright his call of $100 oil by 2020..... Not sharing the whole article due to copyright laws.
Geopolitical reasons aside, I cannot see the case for $100 oil. Then again, I'm 61 years old and I've never seen your country with a president of the sort you have now, so oil at a price money can't buy is not unimaginable either. It might just be traded spot at local level.
If you read the entire article above it's actually a pretty well thought out thesis. For the record, Brent is much more vulnerable to an upside move then WTI.