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Commodities · Oil · Profits · Trading
Vitol, the world's largest oil trader, experienced a 70% plunge in net income to $180 million in Q1 2020, down from $600 million in the prior year, due to the severe oil price crash and a significant losing bet by one of its traders.
The Financial Times reported Vitol's CEO, Russell Hardy, expressed confidence in February that market conditions would not worsen significantly, a statement made before the Saudi Arabia-Russia price war and the pandemic-induced demand collapse. A specific bet by trader Yaoyao Liu on an oil recovery, citing China's quick lockdown exit, "turned sour" as Brent crude halved from $60 to $25 in March.
Despite this, Vitol "done well" during the week US oil prices turned negative, capitalizing on cheap oil for storage and future sale, as reported by the FT. Oil prices have since recovered due to easing lockdowns and OPEC+ production cuts, which were extended until July.
Both Brent and WTI crude were trading lower on Tuesday, June 9, 2020, at $40.45 and $37.20 per barrel, respectively.
