Market microstructure factors in the determination of oil prices
Carlos González Pedraz and
María Teresa González Pérez
Authors registered in the RePEc Author Service: Maria T. Gonzalez-Perez ()
Economic Bulletin, 2020, issue 3/2020, 13 pages
On 20 April 2020 the West Texas Intermediate (WTI) oil futures price for May delivery turned negative for the first time in history. Other crude prices also posted very low values and their volatility soared, far more than that on stock markets. This article analyses the differences between the spot and futures markets for crude, demonstrating the key role they played in the source and subsequent correction of this event, which affected above all WTI contracts more than Brent. The article also highlights the increasingly significant presence of oil exchange-traded funds (ETFs) and their growing use as a retail investment instrument.
Keywords: oil prices; COVID-19; volatility; ETFs; futures; spot prices. (search for similar items in EconPapers)
JEL-codes: E44 G15 G41 Q41 Q43 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:bde:journl:y:2020:i:09:d:aa:n:21
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