Losses on Bank of China Oil Investment Could Hit $1.3b

Total losses from a structured crude oil product marketed to retail investors by the Bank of China could be more than ($1.27 billion), the Caixin financial news outlet reported on Sunday, citing official sources.
More than 60,000 individual investors involved in the scheme have lost deposits worth as much as $593 million, it said. A third of the total had invested more than $7,000 each, Reuters reported.
The Bank of China’s crude oil “bao” is sold to individual customers and is linked to domestic and foreign crude oil futures contracts, including West Texas Intermediate and Brent.
The Bank of China last week settled trade after WTI futures prices fell below $0 for the first time, ending at minus $37.63 per barrel as traders paid to get rid of their oil.
The bank held between 24,000 and 25,000 long positions, with each position the equivalent of 1,000 barrels, leading to an estimated loss of $819 million.
The bank said last Friday that it was “deeply disturbed” by the losses incurred by its investors, and blamed volatility in the global oil market brought about by the global coronavirus pandemic.