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Prices: The front month futures price for Brent crude oil settled at $71.29 per barrel (b) on August 5, 2021, down $4.55/b from $75.84/b on July 1. The front-month futures price for West Texas Intermediate (WTI) crude oil for delivery at Cushing, Oklahoma, decreased by $6.14/b during the same period, settling at $69.09/b on August 5 (Figure 1).What happened to the June oil contract?
While the June contract was certainly under pressure and trading at lows not seen since February 2002 (at least for the ‘next out’), it never slipped below the (positive) $20 per barrel mark. That created an enormous spread between the technical active contract (May) and the one that held the majority of open interest (active trades).What happened to the volatility in crude oil in July?
The 30-day historical volatility for WTI crude oil futures prices rose above 30% on July 19, and volatility for Brent crude oil followed suit the following day, on July 20. Both benchmarks had historical volatility less than 30% throughout June and most of May (Figure 3).What happened to the May WTI oil contract?
The May WTI (West Texas Intermediate) contract was the particular one that suffered so extraordinarily – dropping over 300 percent in a single day. However, the proportion of the US oil market that was active in this contract was very small overall.