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Pierre Andurand, a hedge-fund manager who predicted the oil collapse, said crude is starting a “multi-year bull run” because low prices have curbed supply.

Crude futures, currently trading near $40US a barrel, will rebound to $60 to $70 this year and $80 in 2017, the chief investment officer of London-based hedge fund Andurand Capital Management LLP said in a newsletter to investors. A spokesman for the money manager declined to comment.

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“Large spending cuts are taking a toll on operational maintenance,” according to the newsletter, which was dated February. “After having been in an oversupplied market we expect inventory draws to start in a few months and accelerate quickly.”

Oil has slumped about 60 per cent since mid-2014, prompting companies to lay off workers, cut investment and cancel projects. While prices have rebounded from a 12-year low reached earlier this year on speculation the surplus is easing as U.S. output declines, stockpiles in the world’s largest oil-consuming nation continue to grow.

OPEC leader Saudi Arabia has already achieved its objective of curbing supply growth from rivals, and its diplomatic efforts with fellow producers may be aimed at averting a price surge in coming years as production falls short of demand, according to the newsletter. Most members of the Organization of Petroleum Exporting Countries will meet with Russia on April 17 in Doha to complete an accord to cap oil production, an initiative that has helped revive prices.

“It is possible that the Saudis are now less worried about short-term downside risk than medium-term large upside risk,” Andurand wrote. The kingdom, which “does not want crude oil prices to spike,” has realized that the slump in later-dated futures prices “has created a significant supply gap in the years to come.”