THREE science graduates with a combined fortune of more than £500m have emerged as the commodity traders who led the “oil rush” that has pushed petrol prices to more than £1 a litre.

David Harding, Michael Adam and Martin Lueck are renowned in the City for their skills in targeting the most lucrative trades in commodities, including oil.

Their system - known as the “black box” and based on mathematical algorithms - is now deployed by three of the biggest hedge funds in London and has helped push oil prices towards $100 a barrel.

The three funds, AHL, Aspect Capital UK and Winton Capital Management, control more than £15 billion of funds used to buy future oil contracts and other commodities, usually on the gamble that prices will rise.

Harding - who co-founded AHL and now heads Winton – has his own personalised number plate CTA 1, which stands for commodities trading adviser and stakes his claim to be the City’s premier dealer.

The “super-spike” in oil prices – first predicted by a Goldman Sachs trader in 2005 – has delighted the big banks and hedge fund traders, but has meant misery at the petrol pumps. The major oil producers have blamed the speculators for the surge in oil prices: they have risen by more than 40% since January.

“There is definitely no shortage of crude oil. The market is well supplied,” said Abdullah al-Badri, Opec’s general secretary on Thursday. “Oil is driven by speculation and has become a financial investment.”

Last week it was announced that the average UK price of unleaded petrol had passed the £1 per litre mark for the first time. At some stations, the price is £1.09 a litre.

“Speculators who bet on oil prices rising are creating a false demand and motorists are paying the price at the petrol pumps,” said Brendan McLough-lin, co-founder of Petrolprices. com, the monitoring website.

The formerly unglamorous world of commodities trading has captivated the City in recent years because of the huge returns.

Banks such as Barclays, Goldman Sachs and JP Morgan have all expanded their oil trading operations. Morgan Stanley has even bought warehouse space in Amsterdam where it can hold oil stocks.

But it is the hedge funds that led the way in the complex and huge-scale movements of money into the commodity markets which had gone out of fashion during the dotcom boom.

Harding, who graduated from Cambridge with a first in natural sciences, specialising in theoretical physics, helped to develop a system to identify the likely indicators of commodities booms.

In 1987 he launched AHL with Adam and Lueck, both Oxford science graduates, and they developed “quantitative programmes” that would automatically identify the trades to be executed in a range of “futures”, including commodities, currencies and stock indexes. AHL rapidly became London’s most successful commodity trading company and was subsequently bought by the Man Group.

“These are not your typical City suits with Andy Warhol paintings in their apartments,” said a colleague of Harding’s last week.

“The people they employ have PhDs in financial mathematics and astrophysics.”

Visitors who have been inside the offices of these hedge funds describe quiet trading rooms, operating 24 hours a day, with rows of computers. All the decisions are made using computerised calculations.

After he left AHL, Harding, now worth at least £300m, subsequently founded Winton Capital Management, based in offices in Kensington, west London, while Adam and Lueck established Aspect Capital UK, another hedge fund. By 2004, Aspect Capital was routinely staking £140m a day on the oil market and is now among London’s top 10 commodity trader advisers, with the top spot still being held by AHL.

Last month Harding’s company held a party at the Natural History Museum to celebrate the 10th anniversary of Winton. During that time, the assets under management have grown to more than £5 billion.

All three hedge fund managers are seen as hugely influential in the rush for “black gold”. The big banks have sought to emulate their success and now offer customers “commodities index” investments, although the returns have often been relatively modest compared with those enjoyed by the hedge funds.

The most successful fund cashing in on commodities in the wake of AHL has been RAB Capital, headed by Philip Richards.

Since the launch of its special situation fund in 2001, it has returned more than 4,300%, said to have made it the best performing fund in the world.

The prospect of the price of oil breaking the $100 a barrel barrier was first predicted by Arjun Murti, a New York based Goldman Sachs analyst in 2005. To widespread scepticism, he suggested that the price could reach $105 within a few years.

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