Volatility Alert: Oil Trading Halt as prices crashing below zero
What happened to Oil markets? Some brokers has stopped trading Oils on platforms.
- Oil Trading Stops due to high volatility
- What happened to Oil market?
- What to expect from Oil market?
Oil Trading Stops due to high volatility
Due to increased volatility in the oil market, please note that, with immediate effect, Brent Crude Oil and WTI Crude Oil will no longer be available for new positions on some platforms.
All existing positions can be sustained although there may be adverse effects due to the increase in volatility, poor liquidity and the resultant widening of bid/offer spreads.
Kindly note that many brokers streaming prices as they get them from the liquidity providers, and they are taking all necessary steps to manage the current situation and provide you with the best spreads and pricing.
What happened to Oil market?
The coronavirus pandemic has caused oil demand to drop dramatically, to such an extent that the world is running out of room to store barrels, while Russia and Saudi Arabia continue to produce excess supply.
The Oil crash has also caused a high impact on other global markets, with global stocks falling on Tuesday and the dollar gain against multiple peers as investors reject risk assets.
On Tuesday, European stock markets followed their Asian counterparts, with the pan-European STOXX 600 index down nearly 2% in early trading.
This follows the Monday’s plunge in oil prices to – $40 per barrel, the first time in history Oil has traded negatively.
Furthermore, Australia’s central bank is forecasting the economy will shrink 10% in the first half of 2020 and South Korea is preparing for its biggest first-quarter contraction since 2008.
What to expect from Oil market?
For the first time in history, U.S oil futures prices fell to negative territory at -$37.63 per barrel.
U.S oil spot traded as low as $13 while U.K oil found support at $22.
It seems that the Coronavirus pandemic has fueled a series of events impacting most countries employment figures as well as their commodities’ prices.
The unbalance between oversupplied oil from producers and close to none demand from buyers has triggered a fast market crash.
As no producers will continue to offer their oil at a loss, it is likely that prices will correct as suppliers will shut their plants awaiting for this crisis to end.
Whilst trading is a disaster for oil producers currently, experts are predicting a strong rebound in the near future which will solve storage shortage concerns and is likely the reason why the Brent crude average oil price is holding up at better levels when comparing to WTI, per barrel.
Stay tuned for more updates on this crisis and always make sure to stay safe, either at home or on the platforms.
Make sure to stay updated of the current situation and the update from your brokers.