Bank of China sold oil’s May contract into a historic implosion in crude — and retail investors may have gotten crushed

Retail investors may have lost $85 million in Bank of China’s oil-related funds…

This story was originally published here.

As the dust settles from a record-breaking crude selloff, it’s turning out that retail investors in China may have been on the hook.

Chinese banks hawked wealth-management products tracking U.S. oil futures, marketed with flashy labels like “crude oil treasure” to ordinary Chinese. Buyers are now crying foul over the losses as some investors report they now owed money to banks when crude briefly fell below $0 on Monday.

Local news reports say these oil-related funds were slammed by the strained liquidity in energy trading this week as banks offering these products needed to sell their soon-to-expire futures for the most recent contract and buy the following month’s futures to maintain exposure to oil markets.

But the combination of an oil surplus and winnowing demand saw prices for U.S. benchmark crude futures trade in subzero territory for the first time in history as traders and other speculative investors attempted to avoid taking delivery of physical oil shipments.

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