Oil Slides After ETFs Move Into Later-Dated Contracts
- WTI futures decline as much as 30% after four-day recovery
- Global market could test storage capacity in three weeks
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Oil fell after the biggest oil ETF said it would sell out of its June WTI futures position as physical oil storage levels continue to balloon.
Futures in New York slid as much as 30%, snapping a four-day recovery as the United States Oil Fund LP said it will move all the money it invested in the front-month June WTI oil contract starting today, triggering a massive swing in the price relationship between the June and July contracts. At the same time, the global oil market is on track to test storage capacity limits in as little as three weeks, requiring the shut-in of nearly 20% of global production, according to Goldman Sachs Group Inc.