By Devika Krishna Kumar
(Reuters) – Electronic brokerage TD Ameritrade Holding is restricting customers from buying new positions in certain crude oil contracts after an unprecedented sell-off that sent prices below negative-$40 on Monday, a company official said on Thursday.
The U.S. oil futures market was rocked Monday as a growing glut of supply and weak demand put fund managers and retail investors in the position of potentially having to take possession of thousands of barrels of crude that they would not be able to store anywhere.
That caused a panic that sent U.S. May futures, which expired on Tuesday, from $18 a barrel to a close of minus-$37.63, meaning sellers would have to pay buyers to take their barrels away.
“We made this decision based on the volatility and liquidity in the crude markets over the last week. This allows those markets to continue to return to their prior liquidity and volatility levels,” said J.B. Mackenzie, managing director in futures and forex at TD Ameritrade.
(Reporting by Devika Krishna Kumar; Editing by Sandra Maler and Tom Brown)
