The frenetic gyrations in the oil market did not subside overnight, following the carnage in the front month May WTI contract over the previous days. Attention moved to the June WTI contract, the new front month, where more gasoline was poured onto the fire, as worries continued about the Cushing Oklahoma oil hub running out of storage in the next few weeks. The June contract plunged by 43% at one stage, falling from $20.00 a barrel to $11.60 a barrel in frantic trading.
I will deal with oil in more detail later, but needless to say, the ravages in energy spilled over into the broader financial markets. Equities finally had to confront reality—a seemingly rare event these days—with broader indices falling in Europe and the US. Price declines in oil are driving home the extent of the economic slowdown on the global economy from COVID-19, as opposed to artfully constructed rallies on the back of flawed v-shaped optimism and Federal Reserve quantitative easings.
US Treasury…
