Summary Fear of low prices, electric vehicles and financial discipline are reducing investment in conventional oil projects. Less risky, “short-cycle” projects are gaining favor. Insufficient future supply could lead to higher prices. In July, Pierre Andurand’s hedge fund, Andurand Capital, lost 15% on bullish crude oil bets. Oil was weak in July, but is up 21% in 2018. Notwithstanding this correct outlook, his fund is -5% for the year. Few things are more frustrating for a manager or his clients than losing money on a profitable call. Putting aside the challenges of hedge funds, which we have amply covered in years past (see The Hedge Fund Mirage; The Illusion of Big Money and Why It’s Too Good To Be True ), a bullish outlook on crude enjoys solid fundamental support. Andurand once ran a hedge fund that profited mightily during the 2008 financial crisis, only to fold following large […]