Clive Capital's pessimism has paid off in a big way for the commodity hedge fund this month.
London-based Clive is up about 7% in the first three weeks of May, thanks to a precipitous drop in oil prices. Brent crude oil prices are down 11% this month, their worst in two years.
Clive's bets against European coal, natural gas and energy futures also paid off.
"Given our softer economic outlook, we are very happy to continue our negative-bias energy positions in oil, coal and European gas and power," Clive wrote to clients. And not just to extend, but to increase, as the firm did with bets against oil. On the other hand, Clive ended its bet against U.S. natural gas.
Clive said that the world's oil supply is "good" and that demand is "weak."
The May surge was more than good enough to cover the US$3.3 billion hedge fund's losses through April, which totaled 4.8% for its Class B shares.