Source: Bank sold US oil futures worth $270 million ahead of OPEC+ meeting.
One bank sold large volumes of U.S. Oil Futures Contracts in early afternoon trading Wednesday, according to a source with direct knowledge. This caused prices to drop more than 1% in minutes, and traders scrambled to figure out the reason.
The transaction, which took place just hours before an OPEC+ virtual conference at which the group was expected to extend its supply cuts to the end of first quarter, had traders scrambling for the reason behind the sale.
A person stated that the bank sold 4,000 barrels of U.S. West Texas Intermediate Crude Oil Futures at $69.21 per barrel in a single transaction around 1 p.m. EST (1800 GMT). They added that the buyer immediately sold the contracts, which put pressure on prices.
WTI futures were down from $69.42 per barrel at 12:59 pm to $68.76 by 1:00 pm.
WTI futures closed at $68.54 a barrel, down by $1.40 or 2%.
Was unable to determine who traded the crude oil.
The value of the trade of 4,000 lots is north of $270million. A lot of WTI Futures equals 1,000 barrels.
According to data provided by financial firm LSEG, the average volume of the front-month WTI contracts on the New York Mercantile Exchange has been around 200 tons per minute since September 4.
Robert Yawger, Mizuho's analyst, said that everyone was trying to understand the sudden drop in stock prices. I haven't seen any headlines to explain it. Reporting by Shariq and Scott DiSavino from New York, editing by Jonathan Oatis
(source: Reuters)
