Rapid plunge in oil futures leaves traders guessing
In the absence of any major headline news that could have explained the drop, which hit both international benchmark Brent crude and US oil futures, traders and analysts speculated it may have been caused by an incorrectly entered trade — a “fat finger” error — or a high frequency computer trading program gone awry.
The White House doused market speculation that it was ready to approve an oil release from the US strategic petroleum reserve (SPR) to bring down prices, although it said the option remains “on the table.”
The kind of speedy price decline that hit oil on Monday is more typically associated with unexpected economic news, such as a dismal US unemployment figure or a surprise production boost by Opec countries. There were no such headlines on Monday.
Federal regulator the Commodity Futures Trading Commission (CFTC) is “looking into” the price drop, said commissioner Scott O’Malia, and has contacted exchange operators the CME Group and the IntercontinentalExchange.
“Our people are aware of it,” said O’Malia. “They are “going to get to the bottom of it.”
ICE’s Front-month November Brent crude, which had opened at $116.67 a barrel, at one point fell by as much as $5.17 a barrel to $111.50. US. crude futures also fell sharply. In the minute before that plunge, 151
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