(Bloomberg) -- Oil trader Pierre Andurand is riding a resurgence in crude prices to stage a comeback from the worst-ever run for his hedge fund as his bullish wagers on the commodity start to pay off.
His main Andurand Commodities Discretionary Enhanced fund has made money over the past two months and cut year-to-date losses through Sept. 16 to 15%, according to people with knowledge of the matter, who asked not to be identified because the details are private. The fund was down more than 50% earlier in the year, before curbing losses to 35% after a strong July.
A representative for Andurand Capital Management, which managed $1.3 billion at the end of July, declined to comment.
While prices are still way below his prediction earlier this year of oil rising above $140 a barrel by the end of 2023, the commodity has climbed above $90 in London and New York for the first time this year as global markets have tightened by record demand and constrained supply. World consumption has surged to an all-time peak of 103 million barrels a day, while Saudi Arabia and Russia — leaders of the OPEC+ cartel — have slashed supplies to bolster prices.
“In a nutshell, the Saudis are walking the walk,” Andurand told his clients in his latest investor letter seen by Bloomberg.
He forecast that global oil inventories will continue to fall over the next several months, lending support to prices until they are high enough to trigger an OPEC+ supply response. Andurand went on to predict that a level north of $100 a barrel for Brent could induce such a response.
“We remain positioned long crude futures and have been adding on dips as recent inventory draws add to our conviction of an undersupplied market,” he added.
His bullish calls met with the commodity falling earlier this year, leading to a roller-coaster ride for his fund, which amplifies its bets using borrowed money and operates with no set limits on the amount of risks it takes. The fund had grown its clients’ invested capital more than sevenfold over the previous three years before hitting a rough patch in 2023.
--With assistance from Grant Smith.
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