Oil Trading Volatility Drowns Market

Until recently, oil traders complained that it was nearly impossible to make profits in a listless and rangebound crude market.

US crude futures were down nearly 7%, marking the biggest drop since Russia's invasion of Ukraine.

But after the events of the past two and a half weeks, that sentiment may have backfired, Mia Gindis and Alex Longley reported for Bloomberg News.

In that short span, the oil market went from stagnation to massive price swings. The catalyst: U.S. President Donald Trump’s April 2 announcement of sweeping tariffs, which escalated the ongoing trade war.

Less than a day later, OPEC+ shocked markets by announcing plans to boost output at a faster-than-expected pace.

The double blow sent U.S. crude futures down nearly 7%, marking the biggest drop since Russia's invasion of Ukraine. A key gauge of volatility soared to a six-month high. However, traders say the current turmoil is no easier to profit from, with contradictory and fast-paced developments swinging prices unpredictably.

“It’s not the kind of volatility you can have a medium-term view on, because it changes day to day,” said George Cultraro, global head of commodities at Bank of America Corp. “A 25% tariff can turn into a 10%, 5%, or 2% tariff—or get postponed altogether. It has made pricing and managing risk a bit more difficult.”