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06-12-2014, 03:15 PM
Anybody know how does the drop in oil price affect CAO? I looked at the sensitivity analysis in the 2013 AR and find it confusing. It showed that a 10% drop in oil price will result in a $1.48M gain in "physical and paper derivative instruments", but also stated:
"The Group considers holding oil inventory as part of their overall trading strategy. An increase of 10% in the fair value of oil inventory would have increased profit or loss by US$11,020,000 (2012: US$1,557,000). A 10% weakening of the fair value of oil inventory would have an equal but opposite effect on oil inventory."
What does the above statement mean? Is there a typo somewhere?
"The Group considers holding oil inventory as part of their overall trading strategy. An increase of 10% in the fair value of oil inventory would have increased profit or loss by US$11,020,000 (2012: US$1,557,000). A 10% weakening of the fair value of oil inventory would have an equal but opposite effect on oil inventory."
What does the above statement mean? Is there a typo somewhere?