WTI, June Contract Plummets and May Contract Surges... US Oil Market Chaos Spreads (Comprehensive)

May Futures Rise, June Futures Fall, Prices Converge
Crude Oil ETFs Also Halted Amid Plunge

[Image source=EPA Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The turmoil in international oil prices in the futures market continues unabated.

On the 21st (local time), West Texas Intermediate (WTI) May futures showed a rise of over 100% after recording negative prices the day before, while June futures suffered a humiliating 65% plunge. The US Oil Fund, a leading US oil-related exchange-traded fund (ETF), also experienced a simultaneous decline of 38%.

As of 2:05 PM on the same day at the New York Mercantile Exchange, WTI June futures were trading at $9.55, down 53.25% from the previous day. During the session, the price drop deepened to as low as $6.90. June WTI futures fell from the $20 range the day before to single-digit prices.

While June WTI futures had maintained the $20 range even as May futures recorded negative prices the day before, on the May futures expiration day, they also plunged together.

Conversely, May futures rebounded from the shock of negative prices the day before, rising by 123% to $9. During the session, an unusual phenomenon saw prices surge to the $11 range. As a result, the price difference between the May futures expiring that day and June futures became almost negligible.

The turmoil in the oil market has spread to the financial markets. The US Oil Fund, a representative US oil ETF, plummeted 38% on the day. MarketWatch reported that trading of this ETF was halted temporarily in the morning and that the decline continued to widen afterward.

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