Low Oil Volatility From US Shale Production Hurts Astenbeck

As price volatility was sucked from oil markets due to steady U.S. production, Astenbeck Capital Management LLC found difficulty in 2013. 

Astenbeck, with $3.5 billion under management, lost 8.3% in 2013 and carried that momentum into 2014 with a 2.1% haircut, according to an investor letter reviewed by ValueWalk.

While spot WTI crude prices were up 7.2% in 2013, fund manager Andrew J. Hall noted that “Oil for delivery 8 months forward was basically unchanged and everything beyond was down.”

Despite the disparity between the untradable WTI price and futures, Hall looks forward to higher oil prices.  “We continue to think owning longer dated oil is a very attractive...