Is This The End Of The World’s Largest Oil Fund?
The oil markets have just gone through an epic long squeeze, with oil prices crashing into negative territory for the first time in history. The May 2020 WTI futures contract sunk an agonizing 310% to minus $38.45/barrel by late Monday afternoon, marking the first time that a futures contract for U.S. crude prices went negative--and made all those seemingly improbable 'negative oil' prognostications suddenly appear prescient. Other maturities with oil-related assets such as Brent took it on the chin, too, recording double-digit declines. None, however, came anywhere close to the WTI crash, which adds to the sense of the mystique in the oil markets. Negative oil prices is an absurd notion that essentially means that producers would pay traders to take the oil off their hands. However, there's more to it than meets the eye in the sometimes arcane and convoluted world of futures trading. Front-Month Futures We will be hearing more of this in the coming days and...