Clifford Chance

Unprecedented Drop in Price of WTI Crude Oil Futures Contract - What to Expect from CME and CFTC in Response

April 21, 2020

In an event that is unprecedented in recent memory, on Monday, April 20, the price of a soon-to-expire crude oil futures contract fell over $50 in a single day of trading, settling at a deeply negative price. Traders should be prepared for the possibility that the exchange or the U.S. government will invoke seldom-used emergency powers to affect trading, conditions of delivery, or even settlement price. And in the longer term, both the exchange and the U.S. government can be expected to closely scrutinize trading in the contract, increasing the risk that penalties will be levied against traders found to have violated exchange rules or the law.

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