Oil fell 3% in a single day on November 3. By 16:34 MSK the decline had reached that level. By 16:49 MSK the drop continued, and the market did not buy the move.
Brent and WTI are the two main grades of oil on which futures are traded. A futures contract is an agreement to deliver oil in the future at a price fixed now.
For a trader, this is a day of heightened risk. Volumes are rising, and bid-ask spreads are widening.
What happened to the price?
The move took shape quickly: from calm trading to minus three percent in a few hours. For oil, that is a notable move.
- 3% - the drop in quotes by 16:34 MSK
- 16:49 MSK - the decline continued
- Brent and WTI - volumes are accelerating and spreads are widening on futures for these grades
Why did the market go down?
The market sees Donald Trump's statements as the trigger. In trader feeds the move is labeled exactly that way - "Trump dump."
The details of the rhetoric were not disclosed at the time of publication. But the reaction in quotes came almost immediately.
What does this mean for a trader?
Oil remains the most politicized of liquid instruments. A single comment from the US head of state moves it more than a week of inventory statistics.
The main point: for intraday trading, this means the risk on an open position changes not according to the data release schedule, but at an arbitrary moment.
For this reason, an economic calendar alone is not enough for oil. Statements by politicians are not listed in it.
What to watch next?
The nearest thing worth watching is whether the market holds the new range at the close. The second question is whether the rhetoric will be clarified.
- Day's close. Whether the price stays in the new range or a return begins.
- New comments. A clarification of the rhetoric could reverse the move.
- Conditions for the commodity. It is worth choosing a challenge with access to oil in advance.
So far the decline is proceeding without any attempt at a return.
Is oil even available in your challenge?
Days like this in oil are caught by those who have this instrument available in the first place. Then comes the review of the rules. Some prop programs give full leverage on oil, while others keep it in a separate group with a reduced limit. And for some, commodities are not included in the list of tradable instruments at all. A separate point is holding a position overnight, when news can arrive at any hour. It is better to find this out in a calm market, not in the middle of a wipeout.