November 20, 2014 / 11:20 PM / 3 years ago

Oil trader Andy Hall's Astenbeck hedge fund down 5 pct in Oct

Nov 20 (Reuters) - Renowned oil trader Andy Hall's hedge fund Astenbeck Capital Management had a 5 percent loss in October, after performing reasonably well the prior two months amid tumbling oil prices, according to a letter to investors from Hall.

Westport, Connecticut-based Astenbeck, which manages approximately $3 billion, is now up 6 percent on the year, Hall said in the letter, which was dated Nov. 3 and seen by Reuters on Thursday. Through June the fund had been up nearly 20 percent year-to-date. October's decline was its second-worst drop this year.

Astenbeck could not immediately be reached for comment.

The price of benchmark Brent crude oil fell more than 9 percent in October for its biggest monthly deficit since June 2012. While Brent lost a cumulative 11 percent in August and September, Astenbeck was flat in that period.

In his August and September letters to Astenbeck investors, Hall said he had cut risk and taken profit on some long-dated oil contracts. He also said he expected oil prices to continue to struggle as a result of huge supplies.

It was a surprising revelation and outlook from a hedge fund manager who was once one of the most outspoken bulls in oil. It suggested that Hall had turned short, or bearish, on the market, at least in the near-term.

With his October loss, it's not known if Hall has gone back to being a bigger bull in oil. Before this, Astenbeck's biggest loss for 2014 was in July, when the fund dropped 7 percent. Brent prices fell 6 percent that month.

Hall did not cite any market positions held by Astenbeck in his latest letter to investors. Aside from oil, Astenbeck has also held positions in other commodities, including grains, natural gas and precious metals such as platinum and palladium.

Hall did say that playing oil prices lower had its own risks.

"On balance, there are plenty of reasons to be short nearby oil at the moment," he wrote. "However, it is a proposition not without significant risks, given current price levels and the likelihood of increased volatility. At times it is better to move to the sidelines." (Editing by Leslie Adler)

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