The French-born, Oxford-trained mathematician had studied the early medical reports out of Wuhan, China, and was so sure of this scenario that his hedge funds, now with $1.7 billion under management, had taken big short positions in crude oil futures. By the time prices fell below zero that April 20, Andurand Capital’s funds had banked gains ranging from 60% to 155%.
In early February of this year, the trader made another attention-grabbing call: Crude oil would surge in 2022 to $150 a barrel as postpandemic demand, goosed by massive central bank stimulus, collided with years of declining investment in fossil fuels—and underinvestment in alternatives. And that was before Vladimir Putin delivered a supply-side sucker punch with his February 24 invasion of Ukraine. Andurand, whose biggest fund is up another 112% year to date through April, now expects oil prices to go even higher, with $200 a barrel possible—in coastal centers, that translates to $8 a gallon at the pump. “Putin decided to invade now because the market was tight,” he says.
Realistically, the only thing that can save the world from $200-a-barrel oil is a nasty recession, which is hardly good news.