Algo Trading


Stock Market Blogs

Crude oil plunges to - $37.63 a barrel for the first time in history April 21 2020Market Update

Visit Count: 946

Crude oil plunges to - $37.63 a barrel for the first time in history

With the coronavirus pandemic break out, the financial markets are seeing a lot of volatility and uncertainty. One such event was seen in the oil market on Monday. The demand for crude oil crashed globally leading to the price of the crude oil falling down to - $37.63 a barrel. This is the first time oil prices have turned negative. The negative price suggests that the sellers are literally paying the buyers to take deliveries in order to avoid paying for the storage cost.

The crude oil price at the beginning of the year was over $60 a barrel. Read on to know what led to the fall in crude oil prices and what should be your trading strategy in such a scenario.


Reason for fall in the crude oil price

The major reason contributing to this fall is the excess unused oil kept with American energy companies. The COVID-19 pandemic has brought the world economy to a standstill. In spite of low demand, around 100 million barrels of crude oil are produced in a single day. The excess production is despite a deal with many nations to cut the production of oil including Russia, Saudi Arabia, among others. Owing to this, the world is facing a problem to store all the oil the industries are pumping out. As per the energy expects, the estimated total storage space in the world is around 6.8 billion barrels of which around 60% is already filled.

Besides, oil is traded on its future price and May futures contracts are due to expire on Tuesday. Because of this, most of the traders offloaded their holdings to avoid taking deliveries and incurring storage costs.

Crude Oil Price Chart




What does the future of oil look like


The oil infrastructure around the globe is quite complicated and the situation is likely to take time to come back to normal. It is not so easy to immediately fix the oil industry problem. Moreover, countries like Russia and Saudi Arabia whose economy majorly relies on oil are reluctant to curtail the production. Besides, shutting down the oil wells can prove to be a costly affair as it would require expensive equipment and manpower to restart operations when the demand returns.


What should be your trading strategy?

In these unprecedented times, commodity, specially the high beta commodities like Crude oil is moving on life time and historic volatility. As a trader you have to be very clear with your risk appetite and the choice of trading instruments, specially if you are leaving your positions open overnight. One cannot deny the possibility of this fire sale kind of situation happening in future again. Therefore, traders with low to medium risk appetite should clearly shy away from trading in these high volatile commodities in these uncertain markets.

Blog Enquiry

Prevent Unauthorized Transactions in your demat and trading account --> Update your Mobile Number/Email id with your Depository Participant and Stock Broker. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat/trading account directly from CDSL and Stock Exchanges on the same day.........issued in the interest of investors...

1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.

2. Update your Mobile Number & Email Id with your Stock Broker/ Depository Participant and receive OTP directly from Depository on your Email Id and/ or Mobile Number to create pledge.

3. Pay 20% upfront margin of the transaction value to trade in cash market segment.

4. Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued by NSE vide. Circular No. NSE/INSP/45191 dated: July 31, 2020 and NSE/INSP/45534 and BSE vide Notice No. 20200731-7, dated: July 31, 2020 and 20200831- 45 dated: August 31, 2020 and dated: August 31, 2020 and other guidelines issued from time to time in this regard.

5. Check your Securities/ MF/ Bonds in the Consolidated Account Statement issued by NSDL/ CDSL every month.


  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to ₹ 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost

Dear Investor,
As you are aware, under the rapidly evolving dynamics of financial markets, it is crucial for investors to remain updated and well-informed about various aspects of investing in securities market. In this connection, please find a link to the BSE Investor Protection Fund website where you will find some useful educative material in the form of text and videos, so as to become an informed investor.
We believe that an educated investor is a protected investor !!!

"As per the directives of CDSL and esteemed Exchanges, it has been made mandatory for every client to furnish their latest KYC details viz. Valid Mobile No., Email- Id & Income range on or before 31.05.2021 else your Account will be marked as Non Compliant and will be Freezed till the compliance of such requirement."
"No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorize your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."
"KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary."
Dear Investor if you wish to revoke your un-executed eDis mandate, please mail us with ISIN and quantity on by today EOD."

INDIRA SECURITIES PVT.LTD. (SEBI REG.NO.):NSE TMID: 12866, BSE TMID: 663, CDSL DPID: 17000 SEBI REG. NO.: INZ000188930, MCX TM ID: 56470, NCDEX TM ID: 01277, CDSL REG. NO.: IN-DP-90-2015, CIN : U67120MH1996PTC160201




Indrendu Joshi. Email: Call : 0731-4797275

Investor grievance complaint :