The US Commodity Futures Trading Commission (CFTC) on Monday released a report detailing events that led up to the historic collapse of US crude futures in April. At that time, Benchmark US crude futures crashed into negative territory for the first time in history. According to the report, the collapse was tied to several technical and fundamental factors.
The report said open interest in the May contract was unusually high before expiration, at 634,727 contracts on April 2, compared to the previous 12-month average of 430,000. Open interest continued to increase through 10 days before May contracts expired. This also coincided with an unprecedented demand fall due to the COVID-19 pandemic and a shortage of storage options, the report said.
CFTC’s report, however, does not go into details about trading actions by individuals or companies that may have profited during the event. CFTC Chairman Heath Tarbert said the report could not provide more definitive analysis on individual price movements and trading activities that led to negative prices which were beyond the report’s scope.
