A hedge fund run by one of the world’s most famous oil traders is the latest major victim of surging market volatility

Oil prices crashed in October sending Andurand’s fund over the edge Flickr / O Palsson

  • Andurand Commodities Fund lost 20.9% in October after predicting prices would rise.
  • The fund, run by renowned oil trader Pierre Andurand, is one of the few oil specific funds left in the market.
  • Oil prices tanked in October after supply fears eased despite US sanctions on Iran.

A $US1 billion dollar hedge fund run by one of the world’s most famous oil traders got hit hard by recent volatility in energy markets, losing 20.9% in October.

Andurand Commodities Fund, based opposite London’s Harrods, suffered after Brent crude prices fell dramatically last month with the fund now down more than 12% for the year, according to a report from the Wall Street Journal.

Pierre Andurand, the fund’s manager, is an oil market veteran who made his name at previous fund BlueGold Capital during the financial crisis with bets against oil. His fund made an insane 209% in 2008 after oil lost nearly half its value alongside the collapse of Lehman Brothers.

2018 hasn’t been so kind, however. Andurand previously predicted oil could reach $US100 a barrel but a supply glut despite Trump’s Iran sanctions has seen Brent’s price slide to lows not seen since March. October started well for the fund with Brent reaching $US86 but then dipped sharply on news of waivers on Iranian oil and US production hitting record highs.

Drastic swings in value are nothing new – Andurand’s fund gained 14.7% in September before crashing in October.

Oil market volatility has been the death knell for many a hedge fund in the past with very few oil specific funds still in existence. The news isn’t all bad for Andurand though, his fund is actually up 100% since it was formed in 2013 – in 2016 the fund gained 22.1% after its bullish attitude saw it profit from price rises after Brent hit 13 year lows.

Brent crude is trading up 2.2% today with prices at $US68.09 at 13.30pm (8.30am EST).

3 month Brent crude chart
Brent’s October crash caught out hedge funds Markets Insider