US oil boom

The spread has reached above $11.50 per barrel in the month of June. Oil trader BP and merchants Gunvor, Trafigura, and Vitol, has faced a loss of millions of dollars in this month.

  • In just a month, the world’s strongest and the biggest traders of oil are facing massive losses because the discount price of the US crude has been doubled for the light crude as well as for benchmark Brent.
  • Many known and biggest oil trader BP and merchants have faced tens of millions of dollars losses including the big names of crude oil’s trading desks, i.e., Vitol, Trafigura, and Gunvor.
  • The sources have not yet provided the figure for the actual losses.

According to the reports, the world’s major oil traders are facing massive losses as the discount price has increased, but the actual amount of loss is not yet shared with the market. But it is said that they have faced the loss of millions of dollars due to this increase in the discount price of the crude oil in America.

The spread has reached above $11.50 per barrel in the month of June. Oil trader BP and merchants Gunvor, Trafigura, and Vitol, has faced a loss of millions of dollars in this month.

The exact amount of the loss is not shared by the officials, but the sources said that the losses are enough for the major oil trader BP and the merchants like Gunvor to fire one of their traders each. The companies themselves declined to talk about the issue, and they did not comment on this matter. Also, they are reluctant to show their individual trading books and accounts.

As the traders of crude oil, they export the US crude, and if the spread gets increased, it will result in a major loss for these traders.

On June 6, the increase in the spread up to $11.57 is immense as it did not increase to this amount for more than three years. If we looked at the discount just a month ago, the discount price was low, and the spread was only $5.

If we talk about the price spread, oil markets’ trade is mainly based on the predicted differences in the price among US and European markets.

Now spread has upended per day by more than 11 million barrels which were below 5 million barrels just a decade ago. In the first quarter of this year, the abrupt increase in the spread was one of the obstacles in the crude oil trade.

Traders of the companies like BP have also been affected by this increased spread, and they are also facing the heat of these losses. One of the closest sources of BP has told that two of the traders internally reshuffled and one of their traders dismissed due to this consecutive loss.

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