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Astenbeck’s Hall Sees Oil Poised for ‘Violent Reversal’ Higher

  • Bearish market ignoring ‘fundamentals,’ legendary trader says
  • Brent crude closes at lowest since April, enters bear market

After taking a pounding for two months, global oil prices are set for a “violent reversal" upwards, storied oil trader Andy Hall is telling his investors.

Crude prices may have slipped into bear territory this week, after a 20-percent drop since June. But oil supplies are beginning to shrink from the U.S. to Venezuela, a cooler winter is likely to drive up demand over last year and a glut of short-sellers betting on falling prices can only resist the tide for so long, Hall said in a letter obtained by Bloomberg News.

“The market is being driven by its own momentum and currently that is down," Hall wrote to investors in his Stamford, Connecticut, hedge fund, Astenbeck Capital Management LLC. “But extreme positioning coupled with improving fundamentals should ultimately – and at potentially any time – result in a strong reversal."