Andrew Hall, the legendary trader who rode oil's rise and fall to a super-charged profit record for more than a decade, is human after all.

Roiled like so many of his rivals by last year's unprecedented market volatility and distortions, Hall, 61, suffered a 3.8 percent loss at his $5 billion Astenbeck hedge fund in 2011, according to one investor in the fund.

That outcome adds to signs that Phibro, the century-old commodity trading house that Hall has run for most of the past three decades, also ended in the red, breaking a more than 14-year profit streak for the world's most famous oil trader.

Hall's stumble will come as little surprise after a year in which many of his peers suffered deep losses, but it will stoke a growing debate about his unique role in running both an agile, aggressive hedge fund and Phibro's more complex, niche physical oil trading business.

Occidental Petroleum bought Westport, Connecticut-based Phibro from Citigroup for $370 million in 2009, but owns only 20 percent of Astenbeck, which Hall launched in 2007 with Citi's blessing. Hall owns the other 80 percent, and is therefore in the position of pleasing both fund investors and Phibro's owners.

In tumultuous markets, that's harder than ever as positions swing abruptly from profit to loss. And this year he'll have do it without his top oil trader and long-time No. 2 Malcolm McAvity, who retired last month after 26 years.

Hall has got a double function, said one senior commodity trading executive at a different firm. The executive said his impression from speaking to employees was that Hall was starting to spend more time on the fund, which generates a 2 percent management fee.

If you're making $80 million in fees, what would you rather do?

Hall declined to comment for this story.

Astenbeck, named for a village near the 1,000-year-old German castle he owns, was initially set up in 2007 as a way for investors to profit from trades that mirrored Phibro's strategies. But the fund now appears to have a broader remit, according to its latest offer documents sent to investors.

Now Hall, a UK-born Oxford graduate and avid art collector who burst into wider public view in 2009 for refusing to give up a $100 million bonus, must prove his mettle anew.

VOLATILE RETURNS

Astenbeck swayed throughout last year, falling by more than 10 percent during periods in both May and August, when commodity markets unexpectedly crashed. He recovered those losses, but the fund then crashed by 18 percent in September, taking it down 5 percent for the year at that point, investors have said.

All the markets were really subjected to these big reversals, said Fraser McKenzie, managing partner and head of research at 47 Degrees North, a fund of funds in Pfaeffikon, Switzerland, with about $300 million under management.

The (traders) trying to discern fundamentals just didn't have any impact.

The average commodity fund fell about 6 percent last year, according to Hedge Fund Research. Oil, cotton, copper and other markets swooned unpredictably through the year, roiled by a euro zone crisis and fickle investor sentiment that clashed with the fundamentals that traders like Hall rely on.

Astenbeck, which has grown from less than $1 billion in 2009 to roughly $5 billion last year, returned about 12 percent in 2010 and 29 percent in 2009, according to investors.

Phibro appears to have fared similarly, living up to Oxy's high expectations in the first year. When Oxy bought the unit in 2009 amid a public outcry over Hall's bonus, it had touted the fact Phibro had not made a loss since 1997.

For 2010, Occidental reported $293 million in gains from derivatives not designated as hedging instruments, according to the oil company's annual report, a category that is likely to be heavily influenced by proprietary trading results, analysts say. It had only $64 million such gains in 2009, before Phibro.

An Occidental spokesperson did not reply to multiple telephone messages and emails seeking comment on this story.

Occidental chief executive Stephen Chazen said in July that Hall had a modest second-quarter loss, not a profit; on a call in late October, he said that after a bad third quarter for Phibro, Hall had probably made up all that he lost for the whole year and maybe then some by that point.

Chazen made no comment on the unit's fourth quarter performance on an earnings call last month. But the firm blamed lower marketing and trading results for dragging down its midstream earnings -- where it accounts for Phibro -- to just $70 million, from $202 million the year before. It had made only $77 million in the third quarter for the same reason.

The derivatives line item showed a $47 million loss in the year through September. Full year data is due in late February.

Chazen appeared untroubled by the swings in October, saying he was bullish on oil although not as bullish as Phibro.

I'm really not bothered by the volatility. I know you might be, but being long oil is sort of where we are, he told analysts.

But some say Occidental -- which has stressed the risk controls it has placed on Phibro -- is unlikely to be pleased with the ups and downs, even if the results have minimal impact on earnings that reached $6.8 billion last year.

I think Oxy was happy to have a proactive trading arm looking to make profits off the volatility of the market, but not happy to take risks that the swings would really show up in earnings volatility for them, said Tom Driscoll, an analyst who follows Occidental at Barclays Capital.

It isn't clear which positions Phibro was taking at the time, and it trades across multiple markets including grains, equities and precious metals. Gold dived from a record in September as several big fund managers bailed out.

An SEC filing from the end of the third quarter shows that Astenbeck held about $644 million in U.S. equities, largely concentrated in energy services funds and oil majors such as Total and Chevron .

MORE FUND THAN MERCHANT?

Some dismissed questions of divided loyalties. After all, they said, it is still Phibro's global physical trading operation that provides the insight that informs Hall's trades. Neglecting that would seem counter-productive.

All interests seem relatively aligned and amply incented, said one long-time investor in the fund.

In many respects, Phibro -- which was born as metals and grains trader Philipp Brothers in 1901 -- was already more like a hedge fund than rivals like Vitol and Glencore, which tend to specialize in making pennies on the dollar by moving large volumes of bulk commodities around the world.

Years ago, Phibro was similarly specialized. After joining the company in the early 1980s, Hall bought three refineries and took an active role in shipping. Many of his traders trace their lineage back to oil firms, not Wall Street: Hall had worked several years at BP; McAvity for Conoco ; London-based oil trader Gary Middleditch for Royal Dutch Shell .

But Hall long ago jettisoned those capital-intensive assets, paring back Phibro's operations to a handful of core traders. From some 2,000 employees in the 1980s, it had just 86 by 2009, according to a fund document. It hasn't noticeably expanded.

Phibro focused on playing a prominent role in strategically important crude oil markets across the world, where it could squeeze profits from minor pricing discrepancies and gain valuable insight into global supply and demand.

But at the same time, even before launching Astenbeck, Hall was famed for making large bets on the direction of prices.

SAW IT COMING

Hall was among the first to see in 2003 and 2004 that oil prices were poised to break out of a more than decade-long trading range, as accelerating demand from China and years of underinvestment in production capacity sent prices soaring.

Citigroup reported an $843 million commodity trading profit for 2005, saying it was primarily the result of Phibro's work. The same trading group then made nearly $1 billion in 2008, as oil prices soared to $147 a barrel and then abruptly crashed.

But for a man who made his mark taking bold trend-changing bets on prices, last year was bruising. A series of outside factors buffeted prices -- just as they had on January 1991, when the U.S. bombing of Iraq sent oil plunging from $32 to $21 a barrel. Phibro was reported to have lost $40 million that day.

Last year oil prices lurched higher on the outbreak of war in Libya in February, dived in May amid an abrupt liquidity squeeze, fell anew in June after world governments released emergency stockpiles and crashed in August in a risk retreat.

Grains giant Cargill and oil major BP blamed trading for poor results; the commodity arms of Goldman Sachs and Morgan Stanley logged some of their worst quarters in years; Blenheim and BlueGold, fellow multibillion-dollar heavyweight commodity hedge funds, posted double-digit losses.

CHANGING TEAM

A company that is secretive even by the opaque standards of the commodity markets, Phibro has thrived through multiple owners and varying guises under Hall's leadership, most of that with a core trading team that has seen surprisingly little turnover over most of the past three decades. Senior traders have been with the company for an average of 25 years.

That is slowly changing.

McAvity, who was vice chairman at Phibro responsible for the global oil trading book but had not had a role in running Astenbeck, retired in late January after turning 61.

McAvity refuted assertions that he was unhappy with Phibro and Hall, saying that he was simply ready to end a lengthy career -- particularly after 2011's wild ride.

Last year wasn't fun. It is not to say that you could not have done well in hindsight, but you would probably have been lucky rather than smart, he told Reuters.

Hall has filled two key positions. John Petti, who had been at Phibro from 1986 to 2002, returned three years ago after a stint working at merchant-trader Sempra Energy, and is now the chief oil trader alongside Hall. Christian Harris, also a Sempra alumni, joined in 2009 to run agricultural and non-energy commodity trading, according to a fund document from mid-2011.

At the same time, Astenbeck's investment strategy has grown more independent of Phibro over several years.

A 2009 document for the Phibro Commodity Fund, as Astenbeck was then called, says it maintains positions that are structurally similar to Phibro's proprietary positions.

In the 2011 presentation, that language was gone, although it still said Phibro still provided differentiated insight on regional and global commodity flow.

(Reporting By Jonathan Leff, Braden Reddall and Barani Krishnan; Editing by Alden Bentley)