When we buy stocks – as long as we don’t trade on margin – we know that the worst case scenario is a 100% loss on our investment. But that turns out not to be the case with the oil market, which entered record territory last month.
On April 20th, the price of West Texas Intermediate (WTI) for May delivery opened at $17.73 a barrel, and then started a long slide.
The contract was set to expire the next day, and most traders don’t want to take delivery of 1,000 barrels of oil. Given the COVID-19 induced demand collapse, it wasn’t surprising to see selling pressure the day before the May contract closed.
https://oilprice.com/Energy/Oil-Prices/The-Terrifying-Truth-About-Trading-Oil.html
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