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Andurand Oil Fund Soars 40% Amid Crude Market Meltdown

Nishant Kumar and Catherine Ngai

(Bloomberg) -- Pierre Andurand, the hedge fund manager known for his bullish oil calls, won big as prices crashed to 18-year lows.

The Andurand Commodities Fund was up 40% in the first two weeks of March and 30% year to date, according to people familiar with the matter, who asked not to be named because the information isn’t public. Those gains wipe out the last two years of losses, they added.

A company spokesman declined to comment.

The move comes after unprecedented events caused a fallout in the oil industry. Prices had already started falling in January as investors started raising fears about how the then-unknown coronavirus would affect oil demand in China, the world’s second-largest economy. That sell off was suddenly exacerbated two weeks ago after talks between OPEC+ broke down, as Saudi Arabia and Russia started a war for market share, opening the spigots and hammering oil prices.

Andurand, traditionally among the most bullish oil investors, appeared to pivot to a bearish tone recently. Last month, he started posting on social media about how the coronavirus would have negative implications for the global economy.

Many see the recent economic woes as akin to the financial crisis from a decade ago. Andurand’s fund also soared then, with gains of more than 210% in 2008 and 55% in 2009. Still, oil is now cheaper than any time during the global financial crisis, when the world economy largely came to a halt for a few days.

Industry Malaise

While some called the oil market correctly, the recent price crash has led to bloodshed across the energy industry. Global benchmark Brent crude settled below $25 a barrel on Wednesday, a far cry from the $71 from the start of the year. The plunge has triggered an equally dramatic sell off in energy stocks, leaving many U.S. oil producers scrambling to rein in costs announcing plans to cut capital spending and drill less.

Hedge fund Anchor Bolt Capital became one of the first casualties from the market turmoil. The fund, run by former Citadel money manager Robert Polak, will return outside cash after wagering on and against energy and industrial stocks.

On Wednesday, West Texas Intermediate futures in New York fell 24% to settle at $20.37 a barrel, the lowest since February 2002. Brent futures declined 13% to settle at $24.88 a barrel, the lowest since 2003.

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