The fall was more dramatic for the front-month May contract, which fell 36.9% to $11.53 a barrel, near its lowest level since 1999.
With the May contract expiring Tuesday and no longer the most actively traded, oil watchers don’t consider it the most accurate reflection of price action.
When futures contracts come close to expiration, their price typically converges with the underlying price of physical barrels of oil. Otherwise traders could profit from the difference between oil futures and oil barrels.
When futures contracts come close to expiration, their price typically converges with the underlying price of physical barrels of oil. Otherwise traders could profit from the difference between oil futures and oil barrels.
No comments