Trafigura Bought Oil Wrong
Market manipulation, bad NDAs, Nvidia securities fraud lawsuit, Point72 AI fund, middle market investment banking and the Wu-Tang Clan.
Programming note: Money Stuff will be off tomorrow, back on Thursday.
Trafigura Group is a global commodity trading firm. It is essentially in the business of noticing that oil is cheap in one part of the world and expensive in another part of the world, buying the oil where it is cheap, loading it on ships, and moving it to where it is expensive. In January 2017, Trafigura noticed that oil was cheap on the US Gulf Coast and expensive in Singapore. So, between January and March, it “developed and deployed a large fuel oil export program designed to export fuel oil from the U.S. Gulf Coast to Singapore in order to profit from the open arbitrage.” That is: It made a plan to buy a lot of oil on the Gulf Coast, put it on ships, move it to Singapore and sell it there. Specifically the plan was to deliver “approximately 3.5 million barrels of physical high-sulfur fuel oil … for delivery in Singapore in February, March, and
April 2017.”1