07-12-2015, 12:42 AM
Bloomberg
HOUSTON (Bloomberg) -- Oil’s collapse is sending demand in the U.S. and Asia “on a tear” that will push prices up this year and into 2016, according to hedge fund manager Andrew J. Hall.
“Phenomenal demand growth in most markets” has stemmed a surplus in oil supply that, at 240 MMbbl, is about half what most analysts predicted, Hall wrote in a letter to investors in his Astenbeck Capital Management dated July 1. “For the past 4 weeks the year over year growth in apparent oil demand is a whopping 1.34 MMbpd or 7.2%,” the crude trader said, referring to barrels per day in the U.S.
Despite a selloff in oil prompted by the specter of a Greek default, continued turbulence in the Chinese stock market and a possible nuclear deal with Iran, market fundamentals continue to point to a potential oil rally by the end of this year and going into next year, he said.
Oil prices have fallen by more than half from last year’s June peak as a U.S. drilling renaissance helped create a global glut. West Texas Intermediate crude rose 0.7% to $52.88 at 4:13 p.m. in New York after earlier falling to the lowest intraday level in about three months.
Known for making aggressive bets on rising oil prices, Hall became renowned in 2009 after being paid about $100 million while at Citigroup Inc., a bank that received government assistance during the financial crisis. For more than two decades he led Phibro LLC, a commodities trading company bought from Citigroup by Occidental Petroleum Corp.
Astenbeck has since separated itself from Phibro and Occidental and is now operating in Southport, Connecticut.
Market swings and uncertainty from the negotiations in Greece increase “the odds that monetary authorities will continue to be accommodative for longer,” he wrote.
HOUSTON (Bloomberg) -- Oil’s collapse is sending demand in the U.S. and Asia “on a tear” that will push prices up this year and into 2016, according to hedge fund manager Andrew J. Hall.
“Phenomenal demand growth in most markets” has stemmed a surplus in oil supply that, at 240 MMbbl, is about half what most analysts predicted, Hall wrote in a letter to investors in his Astenbeck Capital Management dated July 1. “For the past 4 weeks the year over year growth in apparent oil demand is a whopping 1.34 MMbpd or 7.2%,” the crude trader said, referring to barrels per day in the U.S.
Despite a selloff in oil prompted by the specter of a Greek default, continued turbulence in the Chinese stock market and a possible nuclear deal with Iran, market fundamentals continue to point to a potential oil rally by the end of this year and going into next year, he said.
Oil prices have fallen by more than half from last year’s June peak as a U.S. drilling renaissance helped create a global glut. West Texas Intermediate crude rose 0.7% to $52.88 at 4:13 p.m. in New York after earlier falling to the lowest intraday level in about three months.
Known for making aggressive bets on rising oil prices, Hall became renowned in 2009 after being paid about $100 million while at Citigroup Inc., a bank that received government assistance during the financial crisis. For more than two decades he led Phibro LLC, a commodities trading company bought from Citigroup by Occidental Petroleum Corp.
Astenbeck has since separated itself from Phibro and Occidental and is now operating in Southport, Connecticut.
Market swings and uncertainty from the negotiations in Greece increase “the odds that monetary authorities will continue to be accommodative for longer,” he wrote.