One rupee: The interim price at which MCX settled April crude oil contract

Brokers urge exchange and Sebi to work out an amicable price, as over 11,000 lots of open interest in the April contract were standing and couldn't be carried forward or squared off yesterday

Following yesterday’s sharp fall in West Texas Intermediate, or WTI crude oil on the Nymex, which traded in the negative $40 range, MCX fixed an interim and provisional price of one rupee on its April contract which expired at 5pm. The formula for the settlement price was not followed yesterday, otherwise the settlement would have been at the negative $37.8 closing Nymex price. In in rupee terms it would be much, much lower in the minus zone.

An MCX circular clarifie that the one-rupee price is provisional and, “Differential settlement, if any, on fixation of the final settlement price shall be done subsequently”.

Brokers, however, say that this is an unusual time and the MCX and the market regulator (Sebi) should sort out the settlement issue at an amicable price. This demand has been made because more than 11,000 lots of open interest in the April contract were standing and couldn't be carried forward or squared off yesterday. Had the price settled based on the formula of US NYMEX closing of WTI oil, sellers would have made very big money.

MCX crude oil expires a day ahead of the Nymex crude oil contract expiry, else today Nymex crude oil May contract expires and was quoting at $1.3 in early trade.

On the MCX today, May crude was trading at Rs 1,582 a barrel, down 10.7 per cent or Rs 190. Gold and silver were trading higher by one per cent and 0.6 per cent respectively.

The problem was noticed in farm produce. Concerns had been raised that the anomalous Crude oil settlement could spill over to some agro commodities resulting in many of them trading lower.