RPT-UPDATE 1-Astenbeck hedge fund up 4 pct in Jan after platinum rally

Thu Feb 7, 2013 8:00am EST

* Hall sees platinum, palladium rising further - letter

* Oil veteran says minor returns on crude in Jan

* Sees 'potential for significant gains' in oil

By Barani Krishnan

NEW YORK, Feb 6 (Reuters) - Veteran oil trader Andy Hall's $5 billion commodities hedge fund made its highest monthly gain since November, after a surge in platinum group metals prices, the fund said in a monthly letter to investors.

The Westport, Connecticut-based Astenbeck Capital Management run by Hall rose more than 4 percent in January to extend its 3.4 percent annual gain for 2012, the fund said.

"January has turned out to be a good month for most risky assets and our portfolio has benefited accordingly," the 61-year-old Hall wrote in the letter dated Feb. 1 and seen by Reuters on Wednesday.

Known for his focus on oil in his monthly letters, Hall attributed the fund's return to rallying platinum and palladium -- collectively known as platinum group metals (PGMs), which are used in jewelry and auto catalytic converters.

Hall said he anticipated PGMs will rise further after last month's rally. Platinum had its best month in a year in January, rising 9 percent.

"PGM prices have rallied significantly in recent weeks but we believe they have much further to travel," Hall said. "Accordingly, we maintain a significant exposure to PGMs and in particular to palladium."

PGMs have soared in value since the middle of last year due to concerns about shrinking output and on expectations of robust automotive sales.

Platinum had its best month in a year in January, rising 9 percent and hit a 17-month peak at $1,740 an ounce on Wednesday due to concerns over output from the world's top producer South Africa.

Palladium was up 5 percent in January and reached its loftiest level since September 2011 on Wednesday at $769.5 an ounce.

Hall said longer-dated oil still represented his portfolio's biggest exposure, although those positions only made a "relatively modest contribution" to the overall return.

Benchmark Brent crude oil rose 4 percent in January. For February, it is up 1 percent, trading at above $116 a barrel.

"We actually take comfort from this since it means that despite a brisk start to the year there exists the potential for significant gains still to come," he said.