Hall's Astenbeck Closing Main Hedge Fund As Bullish Oil Outlook Wanes

Aug 3 2017 | 5:03pm ET

Following a dramatic shift in his long-held bullish bias on oil, famed commodities trader Andrew Hall is shuttering the main hedge fund at $2.4 billion Astenbeck Capital Management after large losses during 2017’s first half.

Hall’s flagship Master Commodities Fund II reportedly lost nearly 30% in the first six months of the year, according to a Bloomberg article citing unidentified individuals familiar with the results. The decision to close the fund comes after Hall, a long-time oil bull, changed tack in July and said in a July investor letter that the global crude oil market had “materially changed,” partly through OPEC’s loss of pricing power, and that $50/barrel oil has become the “new normal” and positions that used to be held with an eye towards longer-term appreciation were no longer viable. 

Previously, Hall had maintained a resolutely bullish stance on oil, calling for a sustained rally based on tighter supplies and decrying “fake news” that was exacerbating downside moves in the commodity’s price. Nonetheless, oil prices have been mired in a prolonged, low-volatility rut as demand from a gradually expanding economy is more than offset by increased production from new sources such as U.S. shale companies and waning influence of OPEC on its members’ production levels. 

Hall founded Southport, CT-based Astenbeck in 2008 after a highly successful stint as an oil trader for Citigroup’s Phibro division during which he famously earned a $100 million bonus that indirectly led to the unit’s sale a year later. 

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