As oil prices breached the negative territory, brokerage platform Trading212 has suspended the Oil-21Apr futures contract.
“Oil-21Apr has been suspended for trading as the contract is absolutely illiquid,” the broker noted. “We will rollover all open positions with Oil-21Apr to the next contract Oil-19May-20 due to unforeseen circumstances.”
Oil prices took a massive hit on Monday as the US crude futures plunged 100 percent, touching all-time low, and even went negative for a while.
The price of West Texas Intermediate (WTI), the benchmark for US oil, even went below minus $40 per barrel, per CME data.
WTI crude oil prices today (ET)
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This crash was fueled by the filling up of US crude storage, along with weak signals from international markets like Germany and Japan. The drying up of global crude demand was primarily the result of the COVID-19 pandemic as most of the major economies stood still due to weeks of lockdown.
The oil companies are now forced to rent storage facilities to hold their surplus, else risk dumping of their produce.
Though the price of June WTI contracts also dipped significantly, each barrel is still trading above $20.
Meanwhile, Brent Crude, the oil benchmark used by Europe and the rest of the world, plunged 8.9 percent, trading at less than $26 a barrel.
The growing surplus in oil also forced Russia and OPEC countries to cut production by record amounts.
More oil troubles
Meanwhile, Hin Leong Trading, a top Singaporean oil company, is struggling with its books as it was recently revealed that it did not disclose $800 million in losses from its investors for several years.
The company is now being approached by the lenders whom it owes at least $4.3 billion. As many as 10 banks including HSBC Holdings, DBS Group Holdings, and OCBC Bank are exposed to this fiasco, according to Bloomberg.