UNITED STATES 
    SECURITIES AND EXCHANGE COMMISSION
  WASHINGTON, D.C. 20549
   FORM 10-Q
    (X) QUARTERLY
    REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
  For the
    Quarterly Period Ended September 30, 2008
  OR ( )
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
  For the
    transition period from
    to.
  Commission
    File Number 0-50272
   CITIGROUP AAA ENERGY FUND L.P. II
    New York

03-0407557(State or other jurisdiction of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)    c/o Citigroup
    Managed Futures LLC
 55 E.
59th
Street -
10th Floor
 New York, New York 10022
    (212) 559-2011
       Yes X     No
    Large accelerated filer
      Accelerated filer
      Non-accelerated filer
    X
  Rule 12b-2
  Yes     No X




---



##### 



CITIGROUP AAA ENERGY FUND L.P. II
  FORM 10-Q
  INDEX
  PageNumberPART I - Financial Information:Item 1.

Financial Statements:Statements of Financial Condition at September 30, 2008 and
    December 31, 2007 (unaudited)

3Statements of Income and Expenses and Partners Capital for
    the three and nine months ended September 30, 2008 and 2007
    (unaudited)

4Notes to Financial Statements, including the Financial
    Statements of Citigroup AAA Master Fund LLC (unaudited)

5  14Item 2.

Managements Discussion and Analysis of Financial Condition
    and Results of Operations

15  18Item 3.

Quantitative and Qualitative Disclosures about Market Risk

19Item 4T.

Controls and Procedures

20PART II - Other Information

21  25  2




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##### 



PART I Item 1.
    Financial Statements  Citigroup AAA Energy Fund L.P. IIStatements of Financial Condition
    (Unaudited)
  September 30,


December 31,2008


2007Assets:Investment in Master, at fair value

$
515,110,630


$
455,299,772Cash


226,486



133,462Distribution receivable


233,948



619,873Total assets

$
515,571,064


$
456,053,107Liabilities and Partners Capital:Liabilities:Accrued expenses:Brokerage commissions

$
2,730,080


$
1,572,916Management fees


854,414



757,271Administrative fees


213,603



189,318Other


192,858



117,888Redemptions payable


12,597,917



8,505,903Total liabilities


16,588,872



11,143,296Partners Capital:General Partner, 2,051.6401 Unit Equivalents outstanding in 2008
    and 2007, respectively


7,667,984



5,853,001Special Limited Partner, 4,487.6100 and 225.0562 Redeemable
    Units of Limited Partnership Interest outstanding in 2008 and
    2007, respectively


16,772,397



642,049Limited Partners, 126,967.9778 and 153,676.4513 Redeemable Units
    of Limited Partnership Interest outstanding in 2008 and 2007,
    respectively


474,541,811



438,414,761Total partners capital


498,982,192



444,909,811Total liabilities and partners capital

$
515,571,064


$
456,053,107    3




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##### 



Citigroup AAA Energy Fund L.P. IIStatements of Income and Expenses and
    Partners Capital
    (Unaudited)
  Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007Income:Net realized gains (losses) on closed positions allocated from
    Master

$
31,156,368


$
18,792,165


$
(36,244,741
)

$
41,772,511Change in net unrealized gains (losses) on open positions
    allocated from Master


49,009,175



(7,188,410
)


203,293,693



8,998,354Interest income allocated from Master


627,923



3,020,373



2,020,883



10,604,311Expenses allocated from Master


(451,878
)


(465,159
)


(1,276,047
)


(1,362,617
)Total income (loss)


80,341,588



14,158,969



167,793,788



60,012,559Expenses:Brokerage commissions


1,907,012



1,114,122



5,782,085



4,208,632Management fees


2,499,531



2,382,966



6,989,411



7,236,877Administrative fees


624,883



595,741



1,747,354



1,809,219Other


152,947



119,525



342,240



215,476Total expenses


5,184,373



4,212,354



14,861,090



13,470,204Net income (loss) before allocation to Special Limited Partner


75,157,215



9,946,615



152,932,698



46,542,355Allocation to Special Limited Partner


(14,905,858
)


(1,408,408
)


(30,192,632
)


(7,415,969
)Net income (loss) after allocation to Special Limited Partner


60,251,357



8,538,207



122,740,066



39,126,386Additions  Limited Partners


1,285,000



30,000



6,765,000



1,030,000Additions  Special Limited Partner


14,905,858



1,408,408



30,192,632



7,415,969Redemptions  Limited Partners


(15,369,881
)


(20,618,061
)


(89,625,314
)


(64,734,293
)Redemptions  Special Limited Partner


(16,000,003
)


(14,148,790
)


(16,000,003
)


(26,856,037
)Redemptions  General Partner














(1,161,472
)Net increase (decrease) in Partners Capital


45,072,331



(24,790,236
)


54,072,381



(45,179,447
)Partners Capital, beginning of period


453,909,861



482,150,871



444,909,811



502,540,082Partners Capital, end of period

$
498,982,192


$
457,360,635


$
498,982,192


$
457,360,635Net Asset Value per Unit (133,507.2279 and 162,004.5495 Units
    outstanding at September 30, 2008 and 2007, respectively)

$
3,737.49


$
2,823.13


$
3,737.49


$
2,823.13Net income (loss) per Redeemable Unit of Limited Partnership
    Interest and General Partner Unit Equivalent

$
444.70


$
49.97


$
884.65


$
225.62    4




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##### 



Citigroup AAA Energy Fund L.P. IINotes to Financial Statements
    September 30, 2008
    (Unaudited)
  1.
    General:          Form 10-K
     5




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##### 



Citigroup AAA Energy Fund L.P. II
    Notes to Financial Statements
    September 30, 2008
    (Unaudited)
    Citigroup AAA
    Master Fund LLC
    Statements of Financial Condition
    (Unaudited)
  September 30,


December 31,2008


2007Assets:Equity in commodity futures trading account:Cash

$
453,374,331


$
708,737,391Cash margin


1,620,046



1,620,046Net unrealized appreciation on open futures  contracts


393,480,649



Unrealized appreciation on open swap contracts


120,495,587



92,444,714Commodity options owned, at fair value (cost $851,610,737 and
    $359,627,764, respectively)


907,003,503



349,972,9591,875,974,116



1,152,775,110Due from brokers






5,911,586Interest receivable


603,558



1,444,226Total assets

$
1,876,577,674


$
1,160,130,922Liabilities and Members Capital:Liabilities:Net unrealized depreciation on open futures contracts

$



$
42,694,277Unrealized depreciation on open swap contracts


46,638,172



15,443,679Commodity options written, at fair value (premium
    $623,575,513 and $163,294,959, respectively)


573,237,614



91,112,724Accrued expenses:Other


196,955



94,011Due to brokers


1,024,100



5,772,030Distribution payable


601,069



1,438,406Redemptions payable






4,122,259Total liabilities


621,697,910



160,677,386Members Capital:Members Capital, 162,045.1284 and 184,668.8591 Units
    outstanding in 2008 and 2007, respectively


1,254,879,764



999,453,536Total liabilities and members capital

$
1,876,577,674


$
1,160,130,922  6




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##### 



Citigroup AAA Energy Fund L.P. II
    Notes to Financial Statements
    September 30, 2008
    (Unaudited)
  Citigroup AAA
    Master Fund LLC
 Schedule of Investments
 September 30, 2008
 (Unaudited)
  Number of
    
    
    
    
    
    
    % of MembersContracts
    
    
    Fair Value
    
    
    CapitalFutures
Contracts PurchasedEnergyIPE Gas Oil Nov 08 - Dec 10
    
    
    5,991
    
    
    $
    (139,145,700
    )
    
    
    (11.09
    )%NYMEX Heating Oil Feb 09 - Aug 11
    
    
    8,121
    
    
    
    (177,536,440
    )
    
    
    (14.15
    )NYMEX LS Crude Oil Nov 08 - Dec 14
    
    
    7,370
    
    
    
    (70,535,684
    )
    
    
    (5.62
    )NYMEX Natural Gas Nov 08 - Dec 13
    
    
    7,962
    
    
    
    (73,183,040
    )
    
    
    (5.83
    )NYMEX NYH RBOB Gas Dec 08 - Dec 09
    
    
    4,828
    
    
    
    (81,312,063
    )
    
    
    (6.48
    )Other
    
    
    
    
    
    
    (157,497,300
    )
    
    
    (12.55
    )Total Futures Contracts Purchased
    
    
    
    
    
    
    (699,210,227
    )
    
    
    (55.72
    )Futures
Contracts SoldEnergyIPE Brent Crude Oil Dec 08 - Dec 14
    
    
    (9,288
    )
    
    
    174,633,200
    
    
    
    13.92IPE Gas Oil Oct 08 - Jun 10
    
    
    (12,491
    )
    
    
    169,793,975
    
    
    
    13.53NYMEX Heating Oil Nov 08 - Dec 09
    
    
    (7,038
    )
    
    
    141,253,178
    
    
    
    11.26NYMEX Natural Gas Dec 08 - Dec 14
    
    
    (18,454
    )
    
    
    467,345,620
    
    
    
    37.24Other
    
    
    
    
    
    
    139,664,903
    
    
    
    11.13Total Futures Contracts Sold
    
    
    
    
    
    
    1,092,690,876
    
    
    
    87.08Net Unrealized Appreciation on Open Futures Contracts
    
    
    
    
    
    
    393,480,649
    
    
    
    31.36Options
OwnedEnergyIPE Gas Oil C Dec 08 - Dec 10
    
    
    6,976
    
    
    
    68,083,335
    
    
    
    5.43NYMEX Crude Oil EC Dec 08 - Dec 11
    
    
    6,905
    
    
    
    119,258,920
    
    
    
    9.50NYMEX Crude Oil EP Dec 08 - Dec 16
    
    
    6,112
    
    
    
    75,028,840
    
    
    
    5.98NYMEX LS Crude Oil C Dec 08 - Dec 10
    
    
    9,560
    
    
    
    95,097,360
    
    
    
    7.58NYMEX LS Crude Oil P Nov 08 - Dec 10
    
    
    7,903
    
    
    
    116,771,830
    
    
    
    9.31NYMEX Natural Gas EC Nov 08 - May 13
    
    
    28,017
    
    
    
    224,912,929
    
    
    
    17.92Other
    
    
    
    
    
    
    207,850,289
    
    
    
    16.56Total Options Owned
    
    
    
    
    
    
    907,003,503
    
    
    
    72.28Options
WrittenEnergyNYMEX LS Crude Oil C Nov 08 - Dec 10
    
    
    (15,452
    )
    
    
    (64,209,880
    )
    
    
    (5.12
    )NYMEX Natural Gas EP Nov 08 - Mar 11
    
    
    (5,462
    )
    
    
    (146,399,091
    )
    
    
    (11.66
    )Other
    
    
    
    
    
    
    (362,628,643
    )
    
    
    (28.90
    )Total
Options Written
    
    
    
    
    
    
    (573,237,614
    )
    
    
    (45.68
    )Unrealized
Appreciation on Swap ContractsEnergy
    
    
    
    
    
    
    120,495,587
    
    
    
    9.60Total Unrealized Appreciation on Swap Contracts
    
    
    
    
    
    
    120,495,587
    
    
    
    9.60Unrealized
Depreciation on Swap ContractsEnergy
    
    
    
    
    
    
    (46,638,172
    )
    
    
    (3.72
    )Total Unrealized Depreciation on Swap Contracts
    
    
    
    
    
    
    (46,638,172
    )
    
    
    (3.72
    )Total Fair Value
    
    
    
    
    
    $
    801,103,953
    
    
    
    63.84
    %
  7




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##### 



Citigroup AAA Energy Fund L.P. II
    Notes to Financial Statements
    September 30, 2008
    (Unaudited)
  Citigroup AAA
    Master Fund LLC
    Schedule of Investments
    December 31, 2007
    (Unaudited)
  Number of





% of MembersContracts


Fair Value


CapitalFutures Contracts PurchasedEnergy





$
162,833,367



16.29
%Futures Contracts SoldEnergyIPE Brent Crude Oil Feb 08 - Dec 10


6,602



(77,608,996
)


(7.76
)Other






(126,738,498
)


(12.68
)Grains






(1,180,150
)


(0.12
)Total Futures Contracts Sold






(205,527,644
)


(20.56
)Net Unrealized Depreciation on Open Futures Contracts






(42,694,277
)


(4.27
)Options OwnedEnergyNYMEX Crude Oil Mar 08 - Dec 11


6,694



62,612,920



6.27NYMEX Natural Gas Feb 08 - Oct 12


27,108



218,208,060



21.83Other






66,409,454



6.65Grains






2,742,525



0.27Total Options Owned






349,972,959



35.02Options WrittenEnergy






(91,112,724
)


(9.12
)Unrealized Appreciation on Swap ContractsEnergy






92,444,714



9.25Unrealized Depreciation on Swap ContractsEnergy






(15,443,679
)


(1.55
)Total fair value





$
293,166,993



29.33
%  8




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##### 



Citigroup AAA Energy Fund L.P. II
    Notes to Financial Statements
    September 30, 2008
    (Unaudited)
  Citigroup AAA
    Master Fund LLC
    Statements of Income and Expenses and Members Capital
    (Unaudited)
  Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007Income:Net gains (losses) on trading of commodity interests:Net realized gains (losses) on closed positions

$
77,034,339


$
40,752,530


$
(79,595,884
)

$
88,155,998Change in net unrealized gains (losses) on open positions


116,281,516



(15,786,591
)


475,132,002



18,419,406Gain (loss) from trading, net


193,315,855



24,965,939



395,536,118



106,575,404Interest income


1,604,109



6,832,489



4,884,179



22,834,413Total income (loss)


194,919,964



31,798,428



400,420,297



129,409,817Expenses:Brokerage commissions, including clearing fees of $656,578,
$592,632,
    $1,923,105 and $1,691,040, respectively


841,449



834,049



2,388,638



2,445,595Other


249,870



173,750



598,673



381,249Total expenses


1,091,319



1,007,799



2,987,311



2,826,844Net income (loss)


193,828,645



30,790,629



397,432,986



126,582,973Additions


59,095,923



37,999,813



113,493,965



119,572,352Redemptions


(108,969,906
)


(75,973,488
)


(250,644,209
)


(195,138,028
)Distribution of interest income to feeder funds


(1,596,428
)


(6,770,209
)


(4,856,514
)


(22,648,644
)Net increase (decrease) in Members Capital


142,358,234



(13,953,255
)


255,426,228



28,368,653Members Capital, beginning of period


1,112,521,530



1,035,681,807



999,453,536



993,359,899Members Capital, end of period

$
1,254,879,764


$
1,021,728,552


$
1,254,879,764


$
1,021,728,552Net Asset Value per Unit (162,045.1284 and 192,003.7928 Units
    outstanding at September 30, 2008 and 2007, respectively)

$
7,744.01


$
5,321.40


$
7,744.01


$
5,321.40Net income (loss) per Unit of Member Interest

$
1,181.98


$
156.94


$
2,359.78


$
639.09 9




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##### 



Citigroup AAA Energy Fund L.P. II
    Notes to Financial Statements
    September 30, 2008
    (Unaudited)
  2.
    Financial
    Highlights:    Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007Net realized and unrealized gains (losses)*

$
575.11


$
58.99


$
1,154.32


$
261.15Interest income


4.69



17.87



13.86



59.11Expenses and allocation to Special Limited Partner**


(135.10
)


(26.89
)


(283.53
)


(94.64
)Increase
(decreases) for the period


444.70



49.97



884.65



225.62Net Asset Value per Redeemable Unit, beginning of period


3,292.79



2,773.16



2,852.84



2,597.51Net Asset Value per Redeemable Unit, end of period

$
3,737.49


$
2,823.13


$
3,737.49


$
2,823.13   *
    
    Includes Partnership commissions and expenses allocated from the
    Master.**
    
    Excludes Partnership commissions, expenses allocated from the
    Master and includes allocation to Special Limited Partner
    in 2008 and 2007.  Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007Ratios to average net assets:***Net investment income (loss) before allocation to Special
    Limited Partner****


(4.2
)%


(1.4
)%


(4.2
)%


(1.2
)%Operating expense


4.7
%


4.0
%


4.8
%


4.2
%Allocation to Special Limited Partner


3.1
%


0.3
%


6.7
%


1.6
%Total expenses and allocation to Special Limited Partner


7.8
%


4.3
%


11.5
%


5.8
%Total return:Total return before allocation to Special Limited Partner


16.9
%


2.1
%


38.9
%


10.4
%Allocation to Special Limited Partner


(3.4
)%


(0.3
)%


(7.9
)%


(1.7
)%Total return after allocation to Special Limited Partner


13.5
%


1.8
%


31.0
%


8.7
%   ***
    
    Annualized (except for allocation to Special Limited Partner, if
applicable)****
    
    Interest income allocated from Master less total expenses
(exclusive of allocation to Special Limited Partner, if applicable)   10




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##### 



Citigroup AAA Energy Fund L.P. II
    Notes to Financial Statements
    September 30, 2008
    (Unaudited)
    Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007Net realized and unrealized gains(losses)*

$
1,173.66


$
122.84


$
2,335.24


$
526.93Interest income


9.84



35.00



28.07



114.08Expenses **


(1.52
)


(0.90
)


(3.53
)


(1.92
)Increase(decrease) for the period


1,181.98



156.94



2,359.78



639.09Distribution of interest income to feeder funds


(9.80
)


(34.67
)


(27.91
)


(113.15
)Net Asset Value per Unit of Member Interest, beginning of period


6,571.83



5,199.13



5,412.14



4,795.46Net Asset Value per Unit of Member Interest, end of period

$
7,744.01


$
5,321.40


$
7,744.01


$
5,321.40   *
    
    Includes brokerage commissions**
    
    Excludes brokerage commissions  Three Months Ended
 September 30,


Nine Months Ended
 September 30,2008


2007


2008


2007Ratios to average net assets:***Net investment income (loss)****


0.2
%


2.2
%


0.2
%


2.7Operating expense


0.4
%


0.4
%


0.4
%


0.4Total return


18.0
%


3.0
%


43.6
%


13.3    ***
    
    Annualized****
    
    Interest income less total expenses    3.
    Trading
    Activities:       11




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##### 



Citigroup AAA Energy Fund L.P. II
    Notes to Financial Statements
    September 30, 2008
    (Unaudited)
      4.
    Fair
    Value Measurements:  Investments.
  Fair Value Measurements. Fair Value Measurements No. FAS 157-2, Effective Date of FASB Statement No. 157
    Quoted Prices inActive Markets for


Significant Other


SignificantIdentical Assets


Observable Inputs


Unobservable Inputs9/30/2008


(Level 1)


(Level 2)


(Level 3)AssetsInvestment in Master

$
515,110,630


$



$
515,110,630


$
Total fair value

$
515,110,630


$



$
515,110,630


$
   Investments.
  Fair Value Measurements. Fair Value Measurements
 12




---



##### 



Citigroup AAA Energy Fund L.P. II
    Notes to Financial Statements
    September 30, 2008
    (Unaudited)
  No. FAS 157-2, Effective Date of FASB Statement No. 157
    Quoted Prices inActive Markets for


Significant Other


SignificantIdentical Assets


Observable Inputs


Unobservable Inputs9/30/2008


(Level 1)


(Level 2)


(Level 3)AssetsFutures

$
393,480,649


$
393,480,649


$



$
Options owned


907,003,503



907,003,503







Swaps


120,495,587







120,495,587



Total assets


1,420,979,739



1,300,484,152



120,495,587



LiabilitiesOptions written

$
573,237,614


$
573,237,614


$



$
Swaps


46,638,172







46,638,172



Total liabilities


619,875,786



573,237,614



46,638,172



Total fair value

$
801,103,953


$
727,246,538


$
73,857,415


$
   5.
    Financial
    Instrument Risks:   13




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##### 



Citigroup AAA Energy Fund L.P. II
    Notes to Financial Statements
    September 30, 2008
    (Unaudited)
             14




---



##### 



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  Liquidity and Capital Resources
        and/or
    Critical Accounting Policies
  Use of Estimates.
 Investments.
  Fair Value Measurements.
  15




---



##### 



Income and Expenses Recognition.
  Options.
  Forward Foreign Currency Contracts. agreed-upon
  Income Taxes.
      Recent Accounting Pronouncement.
 16




---



##### 



Results of Operations
             17




---



##### 



30-day 3-month and/or 90-day
       18




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##### 



Item 3.
    Quantitative
    and Qualitative Disclosures about Market Risk          one-day
  Form 10-K
  September 30,
    2008
    (Unaudited)
  Three Months Ended September 30, 2008% of Total


High


Low


AverageMarket Sector

Value at Risk


Capital


Value at Risk


Value at Risk


Value at Risk*Energy

$
271,550,416



21.64
%

$
347,331,891


$
160,617,551


$
244,071,688Energy Swaps


1,620,046



0.13
%


1,620,046



1,620,046



1,620,046Total

$
273,170,462



21.77
%   *
    
    Average monthly Values at Risk 19




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##### 



Item 4T.
    Controls
    and Procedures      Rule 13a-15(e) 15d-15(e)
  internal control over financial
    reporting
  
    pertain to the maintenance of records that in reasonable detail
    accurately and fairly reflect the transactions and dispositions
    of the assets of the Partnership;
    provide reasonable assurance that (i) transactions are
    recorded as necessary to permit preparation of financial
    statements in accordance with U.S. generally accepted
    accounting principles, and (ii) the Partnerships
    receipts are handled and expenditures are made only pursuant to
    authorizations of the General Partner; and
    provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of the
    Partnerships assets that could have a material effect on
    the financial statements.   20




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##### 



PART II.
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings  Form 10-K Form 10-Q
 Research Analyst Litigation
  Subprime-Mortgage-Related Litigation
    21




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##### 



Auction Rate Securities-Related Litigation
        22




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##### 



Item 1A.
    Risk
    Factors  Form 10-K
   23




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##### 



Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds        (d) Maximum Number(or Approximate(c) Total Number



Dollar Value) ofof Redeemable Units



Redeemable Units(a) Total Number



(b) Average



Purchased as Part



that May Yet Beof Redeemable



Price Paid per



of Publicly Announced



Purchased Under thePeriod


Units Purchased*



Redeemable Unit**



Plans or Programs



Plans or ProgramsJuly 1, 2008  July 30, 2008



1,830.3513



$
3,502.49




N/A




N/AAugust 1, 2008  August 31, 2008



652.3671



$
3,619.40




N/A




N/ASeptember 1, 2008  
    September 30, 2008



1,765.3336



$
3,737.49




N/A




N/A4,248.0520



$
3,618.10




N/A




N/A       Item 3.
    Defaults
    Upon Senior Securities  None  Item 4.
    Submission
    of Matters to a Vote of Security Holders 
    None  Item 5.
    Other
    Information  None 24




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##### 



Item 6.
    Exhibits  Regulation S-K Form 10-K
  Rule 13a-14(a)/15d-14(a)
  Rule 13a-14(a)/15d-14(a)
     25




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##### 



SIGNATURES
     CITIGROUP AAA ENERGY FUND L.P. II
  By:


Citigroup Managed Futures LLC(General Partner)By:


/s/  Jerry
    PascucciJerry Pascucci 
    President and DirectorDate:


November 14, 2008By:


/s/  Jennifer
    MagroJennifer Magro
    Chief Financial Officer and 
    DirectorDate:


November 14, 2008  26