On Monday, April 20, 2020, West Texas Intermediate (WTI) crude oil
front-month futures traded on the New York Mercantile Exchange (NYMEX)
were priced in negative dollars per barrel (b) for the first time since
trading began in 1983. At about 2:30 p.m. ET, WTI traded as low as
-$40.32/b; prices remained below zero for part of the following trading
day.
Market participants that hold WTI futures contracts through
expiration must make or take physical delivery of WTI crude oil in
Cushing, Oklahoma, unless they have made other arrangements ahead of
time. Typically, most market participants close any futures contracts
ahead of their expiration through cash settlement—buying or selling
offsetting contracts—to avoid taking physical delivery; only about 1% of
futures traded go to physical delivery. The extreme market events of
April 20 and April 21 were driven by several factors, including the
inability of traders who had purchased futures to find other market
participants to sell futures contracts to.
https://www.eia.gov/todayinenergy/detail.php?id=43495&src=email
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