RPT-Two more oil execs in Asia leave, in year of poor trade margins

* More than 20 departures from oil industry within a month

* Traditional “musical chairs” not seen this time

* Market affected by poor trading margins, thin volatility
a bane

By Yaw Yan Chong

SINGAPORE, Dec 14 (BestGrowthStock) – Two senior executives have
left Swiss oil trading firm Trafigura in the past two weeks,
bringing the total number of departures in the industry to
more than 20 over the past month, industry sources said on
Tuesday.

Unlike previously when traders traditionally switch jobs
at the end of the year, most of those who left their jobs this
time have yet to resurface in new ones.

Trafigura declined to comment on the departures of its two
executives, Mike Scott, former co-head of its Singapore office
and its crude trading team, and Wong Kong Yin, its head of
operations in Asia. Sources said the positions have been
replaced internally.

Both Scott and Wong, who has been with Trafigura for more
than 10 years, left for personal reasons, sources familiar
with the matter said.

Since about a month ago, investment banks JPMorgan
and Credit Suisse have also seen the departures of a
total of nine people, including traders and support staff from
their commodities teams. [ID:nL3E6N10L9] [ID:nSGE69S04L]

Swiss-based Addax & Oryx Group will close its three-men
Singapore office by the end of the year as part of a
“strategic redeployment”. [ID:nSGE6AM0DE]

The CME Group lost three senior executives, including its
managing director for Asia, although the group, which owns the
New York Mercantile Exchange (NYMEX) where the benchmark West
Texas Intermediate (WTI) crude oil is traded, said it
remained committed to expansion in the region. [ID:nL3E6MO0PV]

Traders said 2010 had been a bad year for trading due to
poor margins.

“Not many players made money and for some, it doesn’t look
as if things will improve next year even,” a Singapore-based
Asian trader said.

“Most of these guys who have left have yet to find new
jobs,” he said, adding that those who had made enough but did
not see much prospects going forward prefer to cash out and
retire.

Traders said poor trading margins were seen particularly
in the fuel oil and distillates market.

RANGEBOUND TRADES

Central to the meagre margins was the tight range within
which global crude benchmarks had traded and this led to
similarly narrow ranges for fixed-price levels for products,
leaving little space to compensate for wrong market calls,
traders said.

For example, the front-month Brent contract has traded
between a low of $69.55 a barrel and a high of $91.45 this
year, up till Monday, versus a range of $46.91-$79.69 for last
year.

Also, for much of this year, price levels have ranged
within a narrow band of around $5.00 a barrel, unlike in 2009,
when prices generally trended upwards, making it easier to
call, they added.

The 30-day at-the-money implied volatility for U.S. crude
for this year ranged at 26.78-45.18, versus
33.87-95.37 for 2009, reflecting a much less volatile 2010,
Thomson Reuters data show.

“The market is less forgiving this year — when a wrong
call is made, there is less room to get out and reverse
positions,” another trader said.

“Worse, the market changes again after you had switched
positions, resulting in a double-whammy.”

(Editing by Ramthan Hussain)

RPT-Two more oil execs in Asia leave, in year of poor trade margins