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Andrew Hall, Citigroup's quarter-billion-dollar oil trader

Peter Cohan — Thu, 28 Feb 2008 11:58:00 EST

Filed under: Employees, Citigroup Inc. (C), Options, Oil

The Wall Street Journal [subscription required] presents a fascinating study of Andrew J. Hall, a Citigroup Inc. (NYSE: C) trader who made $250 million in 2007 due to a successful bet beginning in 2003 that anticipated a change in the way the world valued oil. And his money and attitude have put him in some street fights with his Connecticut neighbors over his $100 million art collection.

What was Hall's trading insight? In 2003 he concluded that long-term and short-term energy prices would soon abandon their historical relationship with one another. For more than a decade, oil had ranged from $10 to $30 a barrel. But he concluded that demand growth -- driven by China and India -- would outstrip supply.

He bet on this trend by investing in the extremely long-term market in which traders buy and sell oil to be delivered years in the future. Back in 2003, oil for future delivery was as much as 20% cheaper than oil in the current -- or "spot" -- market. Hall told traders to bet that this relationship would reverse itself. He bet on this by buying all the oil futures he could for delivery three to five years out along with "call" options that gave him the right, but not the obligation, to buy oil at lower prices in the future. .

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Andrew Hall, Citigroup's quarter-billion-dollar oil trader originally appeared on BloggingStocks on Thu, 28 Feb 2008 11:58:00 EST. Please see our terms for use of feeds.

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Oil futures climb on inventory data

Michael Fowlkes — Wed, 29 Aug 2007 13:20:00 EST

Filed under: Press Releases, Exxon Mobil (XOM), Middle East, Chevron Corp (CVX), BP p.l.c. ADS (BP), Commodities, Oil

Oil prices have been on the move today, climbing over a dollar following this week's inventory report. According to the Energy Department's Energy Information Administration, last week oil inventories dropped for the fourth straight week.

Analysts had been expecting to see inventories fall, but had been expecting to see a decrease of only 800,000 barrels for the week when the actual draw was 3.5 million barrels.

Today's jump is a sign that traders are still willing to overlook fears of a slowing economy and focus on the inventory picture. As the subprime mortgage mess has created widespread fear of a possible recession waiting ahead, oil has fallen pretty sharply from its last month's highs. After hitting a record high of $78.77 on the first of the month, precious crude fell as low as $68.63 last week, a 12.8% selloff during the month.

Oil prices have traded up $1.01 today to $72.74 and hit a high earlier in the day up at $72.93. With today's move, we have seen a 6% rebound from last week's low, but traders should still be skeptical of oil heading back up too much past the $74 or $75 level.

Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.

Oil futures climb on inventory data originally appeared on BloggingStocks on Wed, 29 Aug 2007 13:20:00 EST. Please see our terms for use of feeds.

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