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Hedge Funds

Oil trader Andy Hall, known as ‘God,’ said to close main hedge fund

Andy Hall reportedly is closing his main hedge fund after big losses in the first half of 2017.

Andy Hall, the oil trader sometimes known in markets as "God," is closing his main hedge fund after big losses in the first half of the year, according to people with knowledge of the matter.

The capitulation of one of the best-known figures in the commodities industry comes after muted oil prices wrong-footed traders from Goldman Sachs Group (GS) to BP's in-house trading unit. Mr. Hall's flagship Astenbeck Master Commodities Fund II lost almost 30% through June, a separate person with knowledge of the matter said, asking not to be identified because the details are private.

"I'm shocked," said Danilo Onorino, a portfolio manager at Dogma Capital in Lugano, Switzerland. "This is the end of an era. He's one of the top oil traders ever."

Mr. Hall shot to fame during the global financial crisis when Citigroup revealed that, in a single year, he pocketed $100 million trading oil for the U.S. bank. His career stretches back to the 1970s and includes stints at BP and legendary trading house Phibro Energy, where he was CEO.

"Andy Hall is one of the grandees of oil trading," said Jorge Montepeque, a senior vice president of trading at Italian energy major Eni SpA.

A representative of Astenbeck Capital Management declined to comment. The company managed $1.4 billion at the end of last year, according to a Securities and Exchange Commission filing.

Mr. Hall is the latest high-profile commodity hedge-fund manager to succumb to the industry's low volatility and lack of trending markets. At least 10 asset managers in natural resources have closed since 2012, including Clive Capital and Centaurus Energy. Goldman Sachs reported its worst-ever result trading commodities in the second quarter.

Oil hedge funds such as Astenbeck wagered earlier this year that production cuts led by Saudi Arabia and Russia would send prices climbing. Yet, their bets backfired as U.S. shale producers boosted output and Libya and Nigeria recovered from outages caused by domestic disturbances and civil war.

Mr. Hall consistently pushed against the bearish tide on oil this year, using investor letters to cast doubt on data showing rising crude supplies and arguing that a sustained rally was on its way.

Then last month he changed tack, telling investors that the global crude market had "materially worsened" and that prices may be stuck around $50 a barrel or below. Brent crude fell 22% from the start of the year to a low in June, and though it has since rallied, it's still only about $52.

The fund closure shows "how the world of forecasting the oil market changed after the shale revolution," said Anas Alhajji, an independent analyst and former chief economist at private-equity group NGP Energy Capital Management.

"This is sad news," said Jean-Jacques Duhot, chief investment officer at Arctic Blue Capital, a commodity trading adviser with nearly $200 million in assets. "Andy Hall has been one of the most respected risk-takers in the energy markets over the past few decades."