(Bloomberg) -- Oil prices could spike by $10 to $15 a barrel if Israel strikes Iranian export facilities, hedge fund manager Pierre Andurand predicted.
Such an attack would knock out roughly 1.7 million barrels a day, he said in a Bloomberg television interview in New York on Tuesday. While that’s not a game changer in a 100 million barrel-a-day market, it’s enough to tighten global supplies and bolster futures.
“The short-term risk is for higher prices because inventories are low,” as is speculative positioning, said the trader, who runs commodity-focused Andurand Capital Management. “We have a lot of supply risk potentially in Iran.”
Crude futures rallied above $81 a barrel in London on Monday for the first time since August, as traders braced for Israeli retaliation against Iran following a missile attack last week. Prices have since retreated on disappointment over a lack of economic stimulus in China.
With demand growth slowing and supplies around the world increasing, the market has a “bearish bias” over the medium term, Andurand said.
There’s no need for OPEC+ to revive halted output for the time being, he said. The alliance led by Saudi Arabia has delayed plans to gradually increase output until December, and is due to finalize its decision on the first hike in coming weeks.
“I don’t think they will push it on the market,” he predicted. “I don’t believe they will go for market share and bring a lot of unneeded oil back.”
Earlier this year, Andurand pivoted away from crude towards other commodities, most notably copper and cocoa, predicting that the metal could top $20,000 a ton. Instead, it has slipped below $10,000. Cocoa, meanwhile, has slumped 40% since hitting a record in April.
Andurand said he still has a long position in copper because of low inventories and long-term demand arising from the transition away from fossil fuels. It could reach $30,000 or $40,000 per ton over a five-year horizon, he forecast.
“You need copper to electrify the world,” he said.
(Updates with more detail throughout.)
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