Kelly Evans: The energy profiteers

  • Date: 22-Sep-2021
  • Source: CNBC
  • Sector:Oil & Gas
  • Country:Gulf
  • Who else needs to know?

Kelly Evans: The energy profiteers

Back when the oil price spiked to nearly $150 a barrel, in 2008, it kicked off a controversy about the degree to which "financial speculators" were to blame ( a great retrospective). In fact, none other than Gary Gensler--who became chair of the CFTC, and is now chair of the SEC--said at the time he believed speculation "was partly behind the surge in commodity prices."Â If energy prices (particularly natural gas) stay where they are today, expect this to rear its head again. In fact, overseas, it's already happening. "Robot Hedge Funds Reap Record Gains From Europe's Energy Crunch," Bloomberg this morning. Basically, quant funds owned by Gresham, Systematica, and Man Group have turned to "relatively less liquid markets" like cheese, Turkish scrap steel, and European energy as returns in traditional markets have dried up. The funds mentioned are now up between 23% and 39% year-to-date. (You could've just held Oracle and been up 35%, but I digress.)Â Â Anyhow, these quant funds--and plenty of "value" investors--are now chasing alpha by laying on the energy bets, to the chagrin of policy makers and consumers. But I would point out that none other than the Oil King himself, trader Pierre Andurand--who