Historic oil crash a product of futures market under stress


New York (AFP) – The price for May delivery of West Texas Intermediate, the US benchmark oil, plunged well into negative territory on Monday, an unprecedented crash prompted by the imminent expiration of this month’s futures contract.Yet the price of a barrel of the same grade of oil for June delivery was still positive, albeit at the low value of $20.43 a barrel.The difference demonstrates the nature of a futures markets operating under stress. The price of the May contract plunged to -$37.63 a barrel because, once it expires on Tuesday, buyers either need to take possession of the crude, or …

Read More