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Montevideo, January 27th 2021 - 09:33 UTC

 

 

Pierre Andurand, French 'wonder boy' who predicted the sub zero oil market collapse

Monday, May 25th 2020 - 07:52 UTC
Full article
The trader said he had realized “at an early stage” that the COVID-19 pandemic would be “hard to stop” for governments across the world. The trader said he had realized “at an early stage” that the COVID-19 pandemic would be “hard to stop” for governments across the world.
Pierre Andurand, 43, founder of London-based Andurand Capital bet in February  COVID-19 could represent a rare “black swan” event, and send prices into reverse Pierre Andurand, 43, founder of London-based Andurand Capital bet in February COVID-19 could represent a rare “black swan” event, and send prices into reverse

French oil trader Pierre Andurand was catapulted into the spotlight this year after correctly betting that the deadly novel coronavirus would spark a sub-zero oil market collapse. Andurand, the 43-year-old founder of London-based Andurand Capital who runs two multi-million-dollar funds, bet in February that the deadly COVID-19 outbreak could represent a rare “black swan” event that would send prices into reverse.

Two months later, in another remarkable call, the hedge-fund trader tweeted on the morning of April 20 that oil could turn negative in a perfect storm of evaporating demand, chronic oversupply and scarce storage.

“There is no limit to the downside to prices when inventories and pipelines are full. Negative prices are possible,” tweeted Andurand, who is based in Malta.

“I am not saying it will happen. If it does it would be very short lived. But just be careful out there.”

Andurand, who was born in the southern French city of Aix-en-Provence and studied applied mathematics before attending the French business school HEC Paris, had just predicted the oil market's biggest-ever shock.

Just a few hours afterwards, New York light sweet crude nosedived into negative territory for the first time in history, plagued by demand-destroying coronavirus, a vast supply glut and a Saudi-Russian price war.

West Texas Intermediate crude hit a historic low of minus US$40.32 per barrel on Apr 20 as sellers were forced to pay to offload the May contract amid scarce storage capacity. That compared with around US$60 a barrel at the start of this year.

London's Brent North Sea oil dived to a record-low US$15.98 on Apr 22 but did not turn negative. Andurand's funds have sky-rocketed in value on the back of his remarkable prediction, winning a three-digit percentage since the start of the year.

Yet it has not all been plain sailing. His funds have lost money in recent years in choppy trade - and had also initially faltered at the start of this year.

The Financial Times described him this month as a “comeback kid” who “performs best when markets are at their most volatile”. The business newspaper also noted his luxury London townhouse in plush Knightsbridge and his flash Bugatti supercar.

Andurand had previously correctly forecast that oil prices would strike a record peak of US$ 147 per barrel in 2008. He also correctly predicted they would crash during the notorious global financial crisis.

“When I feel that there has been a significant change in demand and supply, I analyze it in detail and try to assess its overall impact on oil prices,” the Frenchman explained in an interview.

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