Unipec, the trading arm of China’s state-run oil refinery Sinopec, has suspended two senior staff after risky bets on oil prices earlier this year led to heavy trading losses, sources told Bloomberg.
Sinopec confirmed on Thursday that company president Chen Bo and Communist Party secretary Zhan Qi were being suspended, but did not say that this was linked to trading losses.
Unipec has been operating a strategy of simultaneously buying long options and selling puts of crude, said China International Capital Corp. analysts Nelson Wang and Chen Lu, which could have generated the losses.
Volatility in crude oil prices has been a nightmare for markets in the past year, exacerbated by recent political upturns such as the US withdrawal from the Iran deal and subsequent waivers on oil sanctions to other countries. The Brent benchmark was trading close to $53 on Friday, tumbling from a four-year high of $85 a barrel just two months previous.