From Yahoo Finance: 2025-04-19 09:00:00

Oil traders who wished for more volatility may have gotten more than they bargained for, as the market has experienced significant price swings in recent weeks. The trigger was Trump’s tariffs and OPEC+’s output plans, leading to a 7% drop in US crude futures and increased volatility. Traders are finding it difficult to profit from the unpredictable market movements.

The resurgence in volatility has led to losses for some traders, including Cayler Capital’s chief investment officer who was caught off guard by the sudden turbulence. While the short-term boost in trading volumes is apparent, the market’s liquidity is at risk in the long term as investors pull out due to the uncertainty surrounding Trump’s tariff decisions.

The trade war’s impact on the market has forced investors to quickly change their market views, with hedge funds reversing their positions on oil at record speeds. Fleeing outright bets on crude, traders have turned to spread positions with limited risk. Oil consumers are also seeking to avoid volatility by locking in their costs through long positions in Brent and ICE gasoil.

Traders are facing challenges as big price drops can spiral further due to factors like options markets and trend-following funds’ positioning. Commodity trading advisers rushed to turn short on WTI following the market meltdown induced by tariffs, marking a dramatic shift in positioning reminiscent of the collapse of Silicon Valley Bank in 2023. The current market environment presents new levels of difficulty for traders, with pain and tumult becoming the norm.



Read more at Yahoo Finance: Oil Traders Lurch From Praying for Volatility to Drowning in It