Oil-Contango Trade That Boosted BP Profit Fades: Energy Markets
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The profit from stockpiling North Sea crude, a strategy that helped boost BP Plc’s earnings by $500 million in last year’s first quarter, is evaporating amid rising refiner demand and oil-field maintenance.
The price advantage for traders who buy and hold Brent crude for a month instead of delivering it immediately has shrunk 70 percent to its lowest in almost a year, ICE Futures Europe exchange data show. Vitol Group, the world’s largest independent oil trader, said on June 24 the trade no longer makes sense.