One Trader Who Cashed In on Subzero Oil Prices Sees Rare Payout

14th May 2020

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(Bloomberg) -- The day oil prices turned negative will likely be remembered as the climax of the darkest period ever for the petroleum industry, but for one lucky trading shop it was the opportunity of a lifetime.While many rushed to liquidate positions and cover margins as the May contract neared expiration, BB Energy, a medium-sized trading house based in London, bought 250,000 barrels of the West Texas Intermediate crude futures for May delivery, according to a person with knowledge of the situation. The WTI contract closed at minus $37.63 on that day.BB Energy had an edge: It was one of the few with available space to store oil, according to the person who asked not to be identified because the information is confidential. That this trading house could take delivery of the oil was a rare prize given the dearth of storage to hold plentiful supplies of oil across the country.
The volume they purchased was some 10% of the 2.43 million barrels that were ultimately delivered physically for May, according to Nymex.It’s unclear how much it paid for the barrels and if it’s still holding on to them or not. But the well-timed trade means BB Energy has emerged as one of the clear winners of the fallout in oil, which has roiled global markets and economies dependent on the liquid asset

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