The sudden drop in September's trading came amid slowing economic growth in Asia, the world's engine of commodities demand, as exported-oriented nations, including China, suffered from a reduction in overseas orders.
The credit crisis has hit the private, bilateral over-the-counter derivatives market that is the cornerstone of Asia's oil and commodities trading. The region, in contrast to New York and London, does not have a prominent commodities exchange or clearing house, exacerbating counterparty risk. Market participants fear that the other side of their deals could default on obligations
Observed trading in OTC oil derivatives fell last month by 44 per cent compared with year-ago levels, according to Platts, the pricing agency. Traders said the downward trend had continued this month.