The 20 minutes that broke the oil market

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In a 20-minute span that ranks among the most extraordinary in the history of financial markets, the price of oil cratered to a level that few, if any, thought conceivable.

Oil futures dived below zero for the first time ever amid the coronavirus-triggered economic turmoil.

Many things about the explosive, flash-crash-like nature of the sell-off are still not fully understood, including how big a role the Crude Oil Treasure fund played as it sought to get out of the May contracts hours before they expired . What is clear, though, is that the day marked the culmination of the oil market’s most devastating crisis in a generation, the result of demand

“It was mind-bending,” said Keith Kelly, a managing director at the energy group of Compagnie Financiere Tradition SA, a leading broker. “Are you seeing what you think you’re seeing? Are your eyes playing tricks on you?”While the deeply negative prices of that Monday were largely limited to the U.S.

“When we saw the oil price start plunging, we were prepared that our money may be all gone,” she said. They hadn’t understood, she said, what they were getting into. “It didn’t occur to us that we had to pay attention to the overseas futures price and the whole concept of contract rolling.”

 

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Hey - I am a subscriber and your UI is so bad I can’t log in from twitter. Every time I try to read an article I wonder why I subscribe.

maggieNYT November 8th 2016 the day that broke the media.

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