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U.S. commodities watchdog begins review of Monday's wild oil gyrations

U.S. commodities watchdog begins review of Monday's wild oil gyrations
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Saturday, 25 April, 2020, 16:45

The U.S. derivatives regulator has begun a review of Monday’s oil crash, in which crude futures plummeted roughly $40 per barrel in 30 minutes, to ensure the market functioned properly and rule out foul play, an official said.
“We need to understand why that pricing happened at that place, at that time,” Dan Berkovitz, a Democratic commissioner at the Commodity Futures Trading Commission (CFTC), told Reuters in an interview.
“In a situation like this one, we look at all possible explanations, but we will take a close look here because of the extreme price move.”
Crude has slumped over 70% this year on a price war between major producers Saudi Arabia and Russia and a demand slowdown caused by the coronavirus outbreak. By Monday, oil traders were awash with supply and struggling to find enough ships, railcars and pipelines to store fuel.
The situation was compounded as the West Texas Intermediate crude benchmark May contract headed into expiry the following day, meaning traders would have to take delivery of yet more oil. At one point, physical traders were paying $40 per barrel to anyone who would take the oil off their hands.