Commodity funds BlueGold, Clive miss out on oil rally

* BlueGold down 2 percent on first two months of year

* Clive up 3 percent, but trails broader market returns

By Barani Krishnan

March 16 (Reuters) - At least two major commodity funds have missed out on this year's oil rally, one of the energy market's biggest since the financial crisis, market sources said.

BlueGold and Clive Capital, both based in London and known for taking big bets on oil, have relatively weak returns to show for the first two months of the year when crude prices put in one of their strongest two-month performances since 2009.

Trade data shows that some major speculators, including hedge funds, have started building bearish positions on U.S. crude.

Oil prices have been range-bound since the start of March, indicating the run-up that accelerated last month on supply worries and improving U.S. economic data may have lost steam.

BlueGold, which has more than $1 billion in investor funds and is known for its focus on oil, is down about 2 percent on the year. The fund, led by former Vitol trader Pierre Andurand, logged a 1.5 percent loss in January and a half percent drop in February, according to people who have seen its performance data.

Clive, which has about $4 billion under management, is up about 3 percent for the year, after a gain of around 4 percent in February that offset January's 1 percent drop, industry sources said. Clive, led by ex-Moore Capital trader Chris Levett, is also a significant player in metals. But it gained attention in May last year for losing about $400 million in a week on oil after panic selling in crude markets.

This year's star among oil funds appears to be Andy Hall's Astenbeck Management, up more than 13 percent so far, according to an investor in the fund. Astenbeck, based in Connecticut, manages about $5 billion. The better returns mark a rebound for the fund after its first ever annual loss in 2011.

Astenbeck's numbers are not only better than BlueGold's and Clive's. They also outshine the average energy hedge fund, which is up about 8 percent cumulatively for January and February, according to data compiled by hedgefund.net. The broader hedge fund universe, which manages a total of $2 trillion, is up about 6 percent.

Sources that track BlueGold and Clive said managers at the two funds appeared to be deliberately staying nimble with their oil positions, possibly due to skepticism about the rally's staying power.

U.S. crude prices are up 6 percent on the year. Gains in London's Brent crude are more than double that, rising 15 percent.

"They haven't exactly told their investors or anyone for that matter that they don't believe the way this market has been going," said a source who receives performance and other data issued by BlueGold and Clive.

"But their lack of bullish exposure indicates they are ready to pounce the other way the moment prices turn, if they're not already shorting the market that is," added the source.

BlueGold and Clive could not be reached for comment.

Hedge funds and other money managers raised their short positions in futures and options linked to U.S. crude by the equivalent of more than 17 million barrels in the week ending March 6, according to the Commodity Futures Trading Commission.

It was by far the largest addition to short interest in nine months, since the first week of June 2011, when hedge funds and other investors raised their short positions by the equivalent of almost 22 million barrels, in the aftermath of last May's sudden market crash.

Shorting the U.S. oil market remains strictly a minority interest, however. The overwhelming majority of hedge funds remain bullish on the market given its more limited gains since the start of the year compared with Brent. Hedge fund long positions amount to nearly 326 million barrels of oil, compared with just 45 million worth of shorts.

"I know a lot of people who want to be bearish. But the oil price keeps going up, and up, and up, so it's kind of hard for them to take major exposures," said an analyst who speaks regularly with commodity hedge fund managers.

Oil prices have largely run up on investor fear about sanctions on Iranian oil due the Tehran's ongoing nuclear conflict with the West. A slow and steady improvement in the U.S. economy and jobs market have also underpinned gains.

But since February's outsized run that added 10 percent to Brent futures and 9 percent to U.S. crude prices, the market has advanced little. Brent has been trapped at around $125 a barrel while U.S. crude trades faces strong resistance at $110.

"We're at very high levels already, and it'll require another major market shock to propel us further," said Stephen Schork, editor of the Schork Report, an industry newsletter.

"By the same token, if there's any peaceful resolution to the Iranian conflict, we could see a very quick and significant downdraft in prices," said Schork, who estimates a risk premium of at least $15 a barrel over Tehran.

In Thursday's trading, Brent prices initially fell $3 a barrel before paring losses towards the close on news that Britain had agreed to cooperate with the United States in releasing strategic oil reserves later this year.

Fears about demand destruction in fuel could be another reason for fund managers' hesistancy to jump onto the oil rally bandwagon.

The national average for a gallon of regular U.S. gasoline rose to $3.8148 on March 9, according to the survey of gasoline retailers in the continental United States. In the final week of December, the price was just around $3.26.

In the euro zone, motorists are already paying record high prices for gasoline, at above $8 per gallon in euro terms.

"Before the crash of 2008, everything was going up on the belief that the global economy could support anything," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

"Now we know that prices can only rise so much before something has to give."