WTI Crude futures contract expired 20 April

Let us explain fully the overnight developments around WTI Crude oil: Unlike many other instruments you can trade with us, energy CFD prices are based on contracts that have expirations dates (see page 11 of Guide). Up until 20 April, you were trading CFDs based on WTI futures contracts for May’20^th. On 21^st April, all .WTICrude positions were rolled over to June’20 contracts. This simulates closing your trades at this month’s price and reopening at next month’s price. As part of the process, a credit/debit adjustment is made to the affected accounts. The size of the adjustment: Your order volume
     x
1,000 (barrels in 1 lot for .WTICrude)
     x
Spread between May’20 (front month) and June’20 (next month) contract prices:
     for BUY orders: USD 21.38
     for SELL orders: USD 21.41
It’s the crash in May’20 contracts prices (more on them below) that caused some of our clients’ credit/debit adjustment to be an order of magnitude higher than usual. The same logic will apply to .BrentCrude on 29^th April, when June’20 futures contracts will expire. Keep track of contract expiration periods. Volatility in oil futures markets: Following the shrinking demand for fuel around the world due to Covid-19, and the weeks of ramped up production by a few key oil exporters, storage capacities for crude are running out, which understandably hit contract prices with nearest delivery (i.e. expiration) especially hard. As the May’20 expiration date was getting closer, a growing number of traders were finding themselves with WTI futures contracts on their hands, with an ever-worsening prospect of getting a good price if they were to sell the contracts, and no intention of receiving the actual barrels of oil. *Futures contracts for oil are tied to a specific month when the delivery of the underlying commodity must take place. That is the reason for futures contracts having an expiration date, which is shortly before that month of delivery.