The bear case: Oil May Fall to $80, Hedge-Fund Manager Haugerud Says.
Aug. 22 (Bloomberg) -- Crude oil may tumble to $80 a barrel within 12 months as supplies of alternative energy increase, while grain prices may climb on emerging-market demand, said Renee Haugerud, whose hedge fund gained 18 percent this year.Also see here.
The surge in oil has been ``overdone'' by investors seeking holdings in raw materials through the Standard & Poor's GSCI Index, a commodity gauge weighted toward energy, she said. Industrial metals also rose too high, she said.
``They were the sexy commodities,'' Haugerud, founder of the $2.5 billion commodities hedge-fund firm Galtere Ltd., said in an Aug. 19 interview in her New York office. ``Everyone wanted to get long an asset class via the GSCI, and let's face it, the GSCI is crude.''
Grains including corn and wheat may double as wealthier populations in nations such as Brazil and Russia eat more meat, boosting demand for livestock feed, Haugerud said. New energy sources such as solar power and ethanol will stall a recovery in oil prices, she said.
Haugerud's flagship fund has surged almost fivefold since starting in 1999. The long-term performance and this year's return were outlined in a letter sent to an investor. She declined to comment on her fund's returns.
Oil has slumped 22 percent from a record $147.27 on July 11. Futures for October delivery tumbled $6.59 to $114.59 today on the New York Mercantile Exchange. The 5.9 percent drop was the most since December 2004.