En Español



Very usefull links



PW
Bookstore





News links

AP

AFP

Aljazeera

Dow Jones

Oil price

Reuters

Bloomberg

Views and News
from
Norway

 

 

 

 

Top oil funds lead hedge fund losers at half-year mark

 

 

 

LONDON
Petroleumworld 07 17
2017

Many of last year's most successful oil market bulls have seen their winnings dissolve in the first half of this year, as the crude price has wallowed below $50 a barrel despite output cuts by some of the world's largest producers.

Three of the top five worst-performing hedge funds in the first half of the year specialise in trading oil, directly or indirectly, according to a list compiled by HSBC. Two of those had led the performance charts in 2016.

"The majority of funds came into the year with a bullish view driven by supply/demand fundamentals," said Fred Ingham, who invests in hedge funds at Neuberger Berman, adding that the price had fallen since due partly to a focus on U.S. production.

The oil market has been struggling to absorb a surplus of unused crude but when the Organization of the Petroleum Exporting Countries and 11 partners agreed late last year to cut output for the first time in eight years, bulls pushed the price up to a one-year high above $50 a barrel.

But as this year has worn on, OPEC's failure to erase a multi-million-barrel overhang and shale oil's dominance have become apparent, stripping 15 percent off the crude price.

Among the biggest casualties so far is the oil equities-focused AlphaGen Elnath Fund, part of Janus Henderson Investors-owned AlphaGen Capital, which ended 2016 as the best-performing fund with gains of 78 percent, the HSBC data showed.

Six months on, however, and it is now the worst performer, nursing losses of 48 percent.

The firm did not respond to requests for comment but Elnath fund manager Mark Gordon told Reuters last summer he thought the oil price had fallen too far and the market had no spare capacity globally.

"I think the oil price will continue to go up because production globally is falling and that is not sustainable," he said.

Another to call the oil price wrongly in the first half of the year is high-profile trader Pierre Andurand, who shot to fame with his correct prediction on the slide in crude from record highs in 2008.

His Andurand Commodities Fund lost 17 percent between January and June, giving back almost all of 2016's 22 percent gains. David Knott's Dorset Energy Fund lost 42 percent this year, having pocketed 66 percent last year.

"Losses in oil have been sizeable this year for specialists like Andurand," said one hedge fund investor, leading most to reduce their positions aggressively even though they remained bullish.

U.S. hedge fund firm Elm Ridge Capital Partners, meanwhile, lost 23.67 percent year-to-date after gains of 25.5 percent in 2016.

A spokesman for Andurand declined to comment. Dorset and Elm Ridge did not respond to repeated requests for comment.

Many so-called "macro" hedge funds, which bet more generally on macroeconomic trends, also lost money from oil over the past six months, said Philippe Ferreira, head of hedge funds research at Lyxor Asset Management.

"Most ... multi-asset macro funds we track have lost money on oil so far this year because of bullish positions."

Among the losers so far is Conquest Capital Group's Star Fund, which has a roughly 10 percent exposure to energy. It had lost 3.1 percent in the six months to June 30 after gains of 17.1 percent last year, an investor letter showed.

The average macro hedge fund is down 0.8 percent in the first six months of 2017, data from industry tracker Hedge Fund Research showed, compared with returns of 3.68 percent for the average hedge fund.

Story by Maiya Keidan and Amanda Cooper; Editing by Dale Hudson from Reuters.

reuters
.com
07 14 2017

We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels


Round 2.2 & 2.3
Results

 

 

 

 

 

TOP

Contact: editor@petroleumworld.com,

Editor & Publisher:Elio Ohep/
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2017, Petroleumworld   / Elio Ohep - All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.