Oil prices dive in late-session trade

The unexplained drop in prices prompted CME Group to make an announcement that the prices were legit and that there was no technical issues. White House also issued a statement saying no immediate plans to make changes to the Strategic Petroleum Reserve (SPR). Federal regulator the Commodity Futures Trading Commission (CFTC) will also be investigating the price drop.

Crude oil prices dived on Monday amid market speculation that the Obama administration would release strategic supplies to lower gasolines prices ahead of the November 6 election.

Late in the New York Mercantile Exchange trading session, West Texas Intermediate (WTI), or light sweet crude, for October delivery tumbled by $4.35 a barrel from Friday’s close.

The benchmark WTI contract recovered to settle $2.38 lower at $96.62 a barrel.

In London trade, Brent North Sea crude for delivery in November ended down $3.23 to close at $113.79, after falling by as much as $11.50 from Friday.

Analysts scrambled to explain Monday’s dramatic plunge.

“The weakness in crude oil has been attributed to a number of factors, including rumors of a strategic oil reserve release (which have since been denied by the White House), along with chatter of a potential ‘fat-finger’ trade, in combination with light volume and a break of technical levels,” Briefing.com analysts said in a client note.

Via – CNA

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