Trader Andy Hall says oil prices still are on the way higher

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Bearish on oil in the short term: UBS

Astenbeck Capital Management chief executive Andy Hall said that while bulking up on bullish trades a month ago may have been premature, he's still confident that the market will see stronger prices relatively soon.

"With hindsight we were too quick to add to bullish bets in oil although timing the exact bottom of the market is virtually impossible," Hall, whose $3.1 billion fund is flat for the year so far, wrote in an April 1 letter to investors reviewed by CNBC. "It may take a little longer for low prices to work their magic but…there is plenty of evidence that both supply and demand are responding meaningfully" to the 50 percent-plus downturn in crude prices since last summer.

Hall had written in an early-March letter that Astenbeck had closed out its bearish bets—at a considerable profit, he noted— and started adding to their bullish ones.

Expanding on his current reasoning, Hall wrote in the April 1 investor note that U.S. crude oil inventories "should hit a peak in April before declining through the summer." He added that inventory pileups are not occurring on the same scale in key producer nations overseas, and that the "much ballyhooed armada of oil tankers" purportedly being used as a cheaper form of crude storage "has yet to materialize."