Chinese Oil Trader's $688 Million Loss Drags Down Sinopec Profit
- Loss on ‘misjudgement’ of prices and ‘inappropriate’ hedging
- Fourth quarter income also hit by impairments, inventory loss
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China’s oil refining giant said its trading unit lost almost $700 million last year after being wrong-footed by zigzagging markets, revealing one of the biggest losses by a commodity trader in the last decade.
Sinopec blamed the losses at its Unipec unit in part on “inappropriate hedging techniques” and said it closed its positions after discovering the problem. Oil plunged sharply in late November and December, prompting speculation that Unipec may have contributed to the drop as it unwound contracts.