New York (HedgeCo.net) – With oil resuming its slide that started over a year ago, hedge funds that trade oil futures are getting killed. Oil did manage a small bounce from mid-March to mid-May, but over the last month and half, the decline has resumed. Over the last year, the price of crude is down over 50%.

While consumers may be celebrating at the pump, traders are not in a celebratory mood. Astenbeck Capital Management, headed by Andy Hall, lost approximately 17% in July and that is after losses in May and June as well. Hall is widely regarded as one of the top oil traders in the world and he has even earned the nickname “God” in the oil trading world.

Other funds are feeling the pain as well. The Vermillion fund, which is backed by Carlyle Group, has seen its AUM drop from $2 billion to less than $50 million. Armajaro Asset Management is expected to close its $450 million commodities fund after it dropped 11% in the first half of the year.

With oil trading around the $45 per barrel mark, you have to wonder if the $40 level is about to be breached. Oil hasn’t been below $40 since early 2009, and it hasn’t closed a month below $40 since June 2004.

Rick Pendergraft
Research Analyst
HedgeCoVest