Pierre Andurand, a French hedge fund manager, is among the most well-known energy traders in the world. He is behind commodity investment firm Andurand Capital, with Norway’s Håkon Haugnes as Director of Finance and Operations.
Since the turn of the year, Andurand Commodities’ leveraged high-risk fund is down 46 percent, according to Bloomberg. In May, the fund was said to have fallen by nine percent.
The decline comes after three years of insane returns. In 2020, the junk fund received a whopping 154 percent return, after the coronavirus caused oil prices to crash. In 2021 and 2022, the fund is up 87 and 59 percent, respectively.
All we do is supply and demand analysis. When the coronavirus hit, we worked day and night to figure out how it was likely to spread and what that would mean for the oil market, CFO Haugnes previously told DN.
Huegnes met Andurand when he was studying in Toulouse, France, in the 1990s. After a few years as a tech entrepreneur in Norway, Haugnes moved to London, and has worked at Andurand since 2009.
He believes in the rise in oil prices
Andurand Capital trades only in options and futures contracts, mainly in oil and petroleum products. All investment decisions are made by Andurand himself, while Haugnes is responsible for the operational aspects.
Just three months ago, Huegness told DN that oil prices don’t reflect the fundamentals of the oil market. He believes that part of the explanation may be that there are fewer oil professionals trading in the market now than before, so more focus is placed on short-term variables and macroeconomic noise.
Something is not right with the oil market. If you look at it from above, there is a reopening in China, maximum oil production in almost all countries, and an end to the supply of oil from strategic deposits in the USA. Haugnes said that significant oil price variables are not visible at this time and are likely to emerge over the next quarter.
In an interview with DN in the spring of 2022, shortly after the war broke out, Andurand thought the price of oil could go up to $150. Andurand believed that Russian oil would not return to the Western market under Vladimir Putin, and that only parts of the oil would be able to be redirected to countries such as China and India.
– It can take the market a long time to price things like this, as few understand how the market dynamics will go forward. Andurand said oil prices will rise quickly when market players realize that there is a physical shortage of oil.
Still Russian oil
according to financial times Russia’s oil exports reached 8.3 million per day in April, the highest level in three years. This was mainly driven by imports from China and India, which imported 2.1 and 2.0 million barrels respectively, according to the International Energy Agency. At the same time, Russia’s income from oil exports decreased by 27 percent, compared to the previous year.
After the invasion of Ukraine, there were more than Andurand who believed that Russian oil production would drop dramatically. A year ago, the International Energy Agency (IEA) estimated that Russian oil production would drop to an annual average of 8.7 million barrels per day, but Russia’s oil production last month was about 11 million barrels.
Half a year ago, the European Union and the G7 countries agreed on a price ceiling of $60 for Russian oil. The goal was for Russia to have low incomes, but the goal was to keep oil on the market, until inflation stabilized.
A price cap means, among other things, that the provision of services to oil carriers – such as insurance, financing and technical assistance – is prohibited if oil is sold for more than the limit that has been set. Although there are no import restrictions between China and India, companies that ship Russian oil to them could be affected.
“Russia appears to have little difficulty finding willing buyers for its crude oil and oil products, often at the expense of other members of OPEC+,” the International Energy Agency wrote recently, adding that Russia may be increasing production to offset lost revenue.(conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We’d like you to share our statuses using links that lead directly to our pages. Reproduction or other use of all or part of the Content may be made only with written permission or as permitted by law. For more terms see here.
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