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Oil's Black Friday: Algos and options turn a tumble into a crash

What happens next depends on whether the direst predictions for Omicron's impact are realized

Oil, gas
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Photo: Bloomberg

Devika Krishna Kumar | Bloomberg
Black Friday turned red very quickly for global oil markets. 
 
The day after Thanksgiving has been choppy before -- fewer traders can mean more volatility -- but nothing like this year. The prospect of the freshly named Omicron variant of Covid derailing the world’s fight against the pandemic saw an early morning sell-off become a full-blown crash. 

At the end, investors were rushing to cover short positions, analysts were ripping up forecasts and next week’s OPEC+ meeting was up in the air. West Texas Intermediate oil, the U.S. benchmark, closed 13% lower, the biggest decline since April 2020. Brent crude slumped

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First Published: Nov 27 2021 | 7:42 PM IST

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