Oil Falls After Major Index Bails Out of June WTI Contract
- Futures in New York earlier fell to a low of $10.07 a barrel
- The June-July spread widened to $7.69 before recovering
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Oil fell following wild price swings set off when a major index tracked by billions of dollars in funds said it would exit near-term contracts for fear prices may turn negative again.
West Texas Intermediate for June delivery declined 3.4% Tuesday after both the outright price of futures and the spread between the June and July contracts were rocked by volatility. An abrupt decision by S&P Global Inc. to tell clients to sell their stakes in the June contract caused prices to plunge to near $10 a barrel in intraday trading. Crude inventories are filling quickly, forcing investors to confront the possibility that space won’t be available for physical barrels before the June contract expires.