Wild Oil Market Sees Record Contango as Expiry Nears; Hedge funds sense crude at turning point but not fuels

Apr 20, 2020

Lead Stories

Wild Oil Market Sees Record Contango as Expiry Nears
Dan Murtaugh and Alex Longley – Bloomberg
Oil in New York has slumped to its weakest structure on record as the current contract nears expiration, adding extra volatility to a market that’s grappling with a glut and evaporating demand.
West Texas Intermediate crude futures on Monday fell to the biggest-ever discount to those for the following month, a structure known as contango that indicates near-term oversupply. It’s amplified by expiry of the current contract on Tuesday, as traders sell soon-to-be outdated futures and buy up those with a longer shelf-life.

Hedge funds sense crude at turning point but not fuels
John Kemp – Reuters
Hedge funds were net purchasers of petroleum futures and options for the third week running last week as managers gambled that the market has already hit its trough.
Hedge funds and other money managers purchased the equivalent of 29 million barrels in the six most important petroleum futures and options contracts in the week ending April 14.

Funds sell CBOT corn and soymeal as demand fears escalate
Karen Braun – Reuters
Despite the shortened holiday period, speculators pushed their bearish Chicago corn bets to seven-month highs in the most recent week while corn futures remain at historic lows due to unprecedented issues with demand.

After a crazy 12 months, the S&P 500 is about back to where it started
Jeff Cox – CNBC
The S&P 500 has had a highly volatile 12-month run but is little changed in price during the period. Other measures, like those tracking international stocks and smaller companies are much lower. Wall Street strategists are cautious about the rally off the late-March lows.

Exchanges and Clearing

Nasdaq, Cboe Fix Feeds Facing Options Overload
Recent market volatility overwhelmed the Nasdaq BX and Cboe market depth feeds with so much activity that the exchanges did not have enough physical numbers to accurately represent it.
Max Bowie – Waters Technology
Nasdaq’s BX Options market and the Chicago Board Options Exchange (Cboe) both implemented emergency updates to the software that runs their options market depth datafeeds last month after volatile markets stemming from the Covid-19 outbreak meant the exchanges literally ran out of sequence numbers to assign to orders in their systems.

Regulation & Enforcement

Data Technical News #2020 – 11 Nasdaq PHLX Announces Symbol Distribution Adjustment to Top of PHLX Options Data Feed


Stress Endures in Market Where Big Companies Turn for Cash
Paul J. Davies, Anna Isaac and Caitlin Ostroff – WSJ
The normally staid corner of Wall Street where companies and banks borrow money for days or weeks at a time was suddenly at the center of a near financial meltdown last month. Some fund managers are concerned that problems remain despite the quick work of central banks to ease the funding strains.
Known as commercial paper, this more than $1 trillion market of short-term loans, used by companies to cover expenses such as payroll and paying suppliers, froze during March’s coronavirus-induced mayhem.

John Lothian Newsletter

We visit more than 100 websites daily for financial news (Would YOU do that?)

“John Lothian and Company… our industry intelligence.”

Rick Lane

CEO, Trading Technologies

Past Options Newsletters

Pin It on Pinterest

Share This Story