by Theodore Butler
Monday’s spectacular and unprecedented collapse of oil prices is, rightly so, the subject of non-stop commentary. Already considered depressed on Friday’s close, at $18.27/bbl., the May NYMEX crude oil futures contract, at Monday’s official settlement price, had fallen to negative $37.63, down $55.90.
Most observers asked was how the heck was this possible – how could a futures contract for crude oil fall to minus $37 a barrel? The process by which the negative price was determined was illegitimate, as is the exchange on which it trades, the NYMEX, as well as the owner-operator of the exchange, the CME Group (which also owns and operates the COMEX). Yes, I’m fully-aware that the CME Group runs the largest energy and precious metals derivatives exchanges in the world, but since when did size alone guarantee integrity and legitimacy?