In an attempt to curb the rising instability in the crude oil market, The Chicago Mercantile Exchange (CME group) raised the margin required for investors to trade U.S. crude oil futures by 25% to be affected as of the close of the business day of 10th of May.
This decision came in attempt to curb the hot speculative money that has entered the crude oil market in recent months.
CME also raised the margin on Brent oil futures by 23.8%.
At the beginning of last week, CME decided to raise the margins on silver futures contracts; the reaction soon followed as silver price declined by 27% during that week.
The market reacted very promptly to the news and following the price hikes in crude oil the preceding day, the current trade shows that crude oil prices are falling:
The current Nymex crude oil price, short term futures (June 2011 delivery) is traded at 100.29 USD / barrel, a 2.26 USD/b decrease or 2.2%, as of 6.53*.
The Dated Brent spot crude oil declines by 2.13$/b and it is at 113.55 USD / barrel as of 07.03*.
For more on this subject:
- Oil prices fell sharply last week – Weekly recap 2-6 May
- Weekly outlook for May 9-13
- Following the oil prices falls last week what’s up ahead? Oil outlook 9 May