BOC halts trading in 鈥榦il treasure鈥
Print Edition
THE Bank of China said yesterday it had suspended transactions to open new positions for its crude oil futures trading product effective immediately, following other banks in curtailing energy products.
Known as crude oil “bao,” or treasure, the structured product is sold by BOC to individual customers and is linked to domestic and foreign crude futures, including West Texas Intermediate and Brent.
The move came in light of “current market and delivery risks,” BOC said in a statement.
Oil markets suffered turmoil this week after WTI futures collapsed below US$0 a barrel on Monday for the first time in history because of a supply glut following a drop in demand amid restrictions to prevent the spread of the coronavirus. Futures fell to minus US$37.63 a barrel as desperate traders paid to get rid of oil.
The BOC suspended trading in both of its US crude oil contract products for one day on Tuesday.
Brent crude has fallen 72 percent this year because of the impact of the coronavirus pandemic and after major producer Saudi Arabia started a price war, leading Chinese banks and funds to adjust or limit trading in oil-related products and investments.
The Industrial and Commercial Bank of China last month adjusted the bid-ask spread on global crude after prices hit a 17-year low.
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