The price of WTI crude oil is still at a low level, close to $20 per barrel, which is associated with yesterday's record increase in US oil inventories, reaching almost 20 million barrels. In addition, the oil price is still negatively affected by the strong US dollar and the latest data from OPEC indicating a strong increase in exports this month.
Today, after the end of trade on the WTI oil market (OIL.WTI), the contract will rollover, i.e. the delivery date of the futures contracts on which WTI oil prices are based will change. This is due to the expiry of the current WTI oil contract next week. Earlier transition to the next contract, i.e. above mentioned rollover is associated with the transition to a more liquid contract in order to avoid unexpected price movements associated with expiration.
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Open account Try demo Download mobile app Download mobile appCurrently, the difference between the current and next contract is over $6.5 per barrel, which means that in the long position there will be a profit increase corresponding to approx. $6.5 per barrel, but at the same time in swap points a profit corresponding to an increase of approx. 6$. 5 per barrel will be deducted (negative swap points) to make the balance neutral. The difference between the profit arising from the rollover of the contract (the so-called rollyield) and between the accrued swap points can be positive or negative depending on the market situation (e.g. strong sell-off of the expiring contract and strong buying of a new contract). For a short position, a loss will be charged corresponding to a price increase of approx. $6.5 per barrel and at the same time positive swap points corresponding to a price increase of approx. $6.5 per barrel will be calculated. It is also worth mentioning that the positive aspect of rollover is the ability to hold a position longer than it would appear from period of validity of the underlying instrument.
This means that if there are no factors changing the price of the instruments between today's closing nd tomorrow's opening, then the WTI oil opening price should be higher and the other instruments lower by specific values. The exact size of the base will be known at the close of the session and will be available on our website. Clients with limit and stop orders close to the current price are asked to adjust them by the size of the base, otherwise they will be executed according to the standard procedure. Therefore, it is also worth updating the stop loss and take profit levels depending on your position.
Rollover table and a detailed description of the rollover mechanism available at this link
The difference between the current and next contract is over $6.5 per barrel. This represents over 30% of the current price, therefore it is worth keeping in mind when it comes to pending positions and stop loss levels together with take profit depending on the position side. Source: Bloomberg
The price of oil is still low. During the night rolling will take place and the price of the next contract should open somewhere around 27 USD per barrel. Source: xStation5
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