Oil Price Optimism | Russell T. Rudy Energy LLC
“World Oil” reports that Andy Hall, a well-known hedge fund manager with Astenbeck Capital Management, defies the prevalent oil market mood of gloom and doom. While he admits that times are tough, he does not see that current situation as a replay of the busts of 1998 and 2008. Yes, prices have dropped by more than 50% over the past year, but he rejects the premise that the world is “awash in oil”.
To support his view, Hall notes that current commodity prices close to delivery are not significantly lower than those further out in the future. As additional evidence that the global crude market is only moderately oversupplied, he contends that there is still 200 million barrels of storage available. Further, he predicts that U. S. crude output will decrease by 6% in the second half of 2016.
Hall has told investors that “We think prices are discounting a worst case scenario” when it comes to Chinese demand. He went on to say that “Extreme positioning creates the potential for a rapid recovery in prices.”
We can only hope that he is correct. To read the article in its entirety, please go to http://www.worldoil.com/news/2015/9/04/hedge-fund-manager-hall-says-global-market-not-awash-in-oil .
