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[SINGAPORE] Embattled commodity merchant Noble Group is expanding its Singapore oil team to focus on growing regional demand despite a price rout that has hurt some companies trading crude oil and refined products.
Noble, one of Asia's biggest commodity traders, is expanding its oil desk even as it remains under pressure from a dispute that started when little-known Iceberg Research accused it of inflating its asset values.
Despite the price rout, Noble has hired three middle distillates traders from BP to join two existing traders for jet fuel and gasoil, and has also added three crude traders to start trading physical cargoes in Asia, sources close to the matter said.
"As the world's oil demand continues to shift east, and as the only global trading house headquartered in Asia, we are uniquely positioned to capture local opportunities ... as various economies increasingly open up their oil industries,"said Ouyang Xiuzhang, Noble's head of Asia Energy and Metals.
The new hires include Khoo Teng Siong, ex-leader of BP's Singapore middle distillates team.
The new crude traders are Kevin Du, formerly of Brightoil and Royal Dutch Shell, Morten Burr-Jensen previously with Citi, and SH Ang, formerly of merchant giant Vitol.
Commodity merchants like Noble have been hurt by a price rout across oil, coal, iron ore, metals and other commodities.
Noble's share price has fallen over 60 per cent since July 2014 - when the downturn in oil prices started - while its credit default swap (CDS) value, which gauges the risk of a company's default, has soared.
Glencore, the biggest listed merchant, has likewise seen its share price fall two-thirds since July 2014, with its CDS values jumping. Ratings agency Standard & Poor's on Thursday revised its outlook for Glencore from stable to negative.
Despite plunging prices, oil markets are still seen as a profit opportunity, largely due to healthy demand. "In most commodities, like dry-bulk, demand is down while production remains high, so the value of our assets and stocks is falling. We can't even sell much or trade much due to low demand," a trader with another merchant said. "At least in oil, demand is still strong so we can sell product and also make money from arbitrage," he said.
Sources said Noble was likely eyeing Australia, where oil products imports are rising following refinery closures.
Noble might also look to China as reforms allow more independent companies to import and store crude oil.