Thread by @OilSheppard

#SCOOP

Vitol: the inside story of the oil crash

The top oil trader has been dogged for months by rumours it lost big in oil crisis.

Here’s what really happened:

* Losses on derivative bets Feb/Mar
* Q1 net income down 70% to $180m

W/ @humenm #OOTT

ft.com/content/a8616e…

Some of the company’s traders thought the worst of the oil demand hit was over by mid-February as China appeared to be getting coronavirus outbreak under control.

We all know what happened next.

* Saudi-Russia price war
* Coronavirus goes global
* Oil demand crashes #OOTT

A rumour ripped through market about massive losses, likely given some credence by a headhunter emailing it to a rival. The headhunter retracted it.

The fact Vitol ultimately had positive Q1 net income pours cold water on number. People familiar say grossly exaggerated #OOTT

Vitol also had to move vast to reorientate its vast physical oil trading operation, which normally moves 7-8m barrels a day of oil

But since mid-March the signs are the closely guarded trader has largely started to perform well, breaking out the playbook for an oversupplied market

* Increased access to storage
* Snapping up cheap barrels
* Said to have performed well in week US prices went negative #OOTT

Vitol was in a strong financial position coming into the oil crisis after a near record year in 2019

* Had net income of $2.2bn last year and sitting on little-to-no net debt
* After decline in Q1 net income, some now see 2020 turning into another bumper year.

#OOTT