Oil market volatility has claimed yet another major victim

Oil
prices crashed in October sending Andurand’s fund over the
edge

Flickr / O
Palsson

• Andurand Commodities Fund lost 20.9% in October after
  predicting prices would rise.
• The fund, run by renowned oil trader Pierre Andurand,
  is one of the few oil specific funds left in the
  market.
• Oil prices tanked in October after supply fears eased
  despite US sanctions on Iran.

A $1 billion dollar hedge fund run by one of the world’s most
famous oil traders got hit hard by recent volatility in energy
markets, losing 20.9% in October. 

Andurand Commodities Fund, based opposite London’s Harrods,
suffered after Brent crude prices fell dramatically last month
with the fund now down more than 12% for the year,
according to a report from the Wall Street Journal.

Pierre Andurand, the fund’s manager, is an oil market
veteran who made his name at previous fund BlueGold Capital
during the financial crisis with bets against oil. His fund made
an insane
209% in 2008 after oil lost nearly half its value alongside
the collapse of Lehman Brothers.

2018 hasn’t been so kind, however. Andurand previously
predicted oil could reach
$100 a barrel but a supply glut despite Trump’s Iran
sanctions has seen Brent’s price slide to lows not seen since
March. October started well for the fund with Brent reaching $86
but then dipped sharply on news of waivers on Iranian oil and US
production hitting record highs. 

Drastic swings in value are nothing new — Andurand’s fund
gained 14.7% in September before crashing in October.

Oil market volatility has been the death knell for many a
hedge fund in the past with very few oil specific funds still in
existence. The news isn’t all bad for Andurand though, his fund
is actually up 100% since it was formed in 2013 — in 2016 the
fund gained 22.1% after its bullish attitude saw it profit from
price rises after Brent hit 13 year lows. 

Brent crude is trading up 2.2% today with prices at $68.09
at 13.30pm (8.30am EST). 

Brent’s
October crash caught out hedge funds

Markets
Insider