What has changed in the oil market? Even the God of oil trading has fallen.

Martinghoul said:
If I look at the WTI curve, I don't see the phenomenon you describe here.

Specifically, in the past 12 months, I don't see a particularly large move in the curve. 2017 YTD, when Andy Hall's fund's return has been reported as -30%, I can see that the curve has gone from very slight backwardation to being reasonably in contango (as per your suggestion, I've looked at the Z17 - Z22 time spread). If he were short the fronts and long the back contracts, he should have benefited. A similar story in Brent.

To be more specific, YTD in 2017 Z22 WTI contract is down $3.20 (from $56.77 to $53.57). During the same period, Z17 WTI is down $7.04 (from $57.06 to $50.02).

If your theory were correct, it may have explained the loss his fund experienced in 2016, during which the curve went from contango to slight backwardation. However, if that were still the trade, all that money should have come back by mid 2017. Obviously, it didn't.
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I'm not saying it was that exact spread. Historically per his interviews, he has been long 3 to 5 years on the curve and short the front end. He is VERY active in all the 12 month strips and the Z7Z8 strip was particularly volatile after the Nov OPEC meeting. In the last 2 months that strip rallied 2 1/2 dollars (flattening) alone. The point is the situation is not as simple as you like to portray. If you were long some part of the yield curve would it be fair to say you just stay long rates?

And to be clear, Andy was short oil in 2008 from the top and short oil in 2013. And his track record goes back some 40 years at Phibro. Should he have retired a few years ago? In hindsight, sure. You can say that about a lot of people.
 
bh_prop said:
If you say so. Oil futures traded >57 first week of 2017. Last time it was <20 was when? 2003?
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That depends on what you're looking at and what is defined as a "range", but let's not worry about little details like that. No one ever said it's tested the lower range yet, you've got to love people who assume everything and know nothing.
 
Maverick74 said:
Not quite. Andy Hall is NOT long oil. He is long the curve. .
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Maverick74 said:
I'm not saying it was that exact spread. Historically per his interviews, he has been long 3 to 5 years on the curve and short the front end. He is VERY active in all the 12 month strips and the Z7Z8 strip was particularly volatile after the Nov OPEC meeting. In the last 2 months that strip rallied 2 1/2 dollars (flattening) alone. The point is the situation is not as simple as you like to portray. If you were long some part of the yield curve would it be fair to say you just stay long rates?

And to be clear, Andy was short oil in 2008 from the top and short oil in 2013. And his track record goes back some 40 years at Phibro. Should he have retired a few years ago? In hindsight, sure. You can say that about a lot of people.
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Doesn't matter , bottom line Andy was wrong and clueless .
 
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