The devil in the detail catches unaware traders off guard from Beijing to Singapore amid epic crash in crude oil prices
- Bank of China stopped allowing new positions in its US and UK crude products
- China Construction Bank and Bank of Communications also suspended opening new positions on products linked to crude oil for individuals
April Dong stared in disbelief at the oil price on her phone.
It was Monday night in China, just about the time traders in New York were having their morning coffee. West Texas Intermediate had been sliding all day since it opened at about US$18 a barrel. When prices hit US$11, Dong closed out, having lost about half her money.
Her pain has been felt throughout Asia this week by retail investors who thought they were buying the dip but instead got crushed by oil’s unprecedented collapse below zero. From Beijing to Seoul to Mumbai, the oil-tracking funds that offered cheap entry for the layperson suffered substantial losses.
“I’m not an oil professional, it’s natural that I don’t know the concept of negative pricing and rolling,” Dong, 31, said in a phone interview. “Oil should at least have some kind of value. There’s no way it should fall into sub-zero value.”
