Plunging crude oil prices: Anil Singhvi explains what investors, traders should do

Crude oil prices may not see a sharp spike in near term and countries whose economy is primarily dependent on oil may bear the brunt, Zee Business Managing Editor Anil Singhvi said today. His advice to investors is to keep a close watch on oil producing countries like Russia, Venezuela and Brazil. This disruption is likely to impact many countries hitting their economy very badly.

He says that it should not come as a surprise if countries reduce their oil consumption even more than they already have done. Crude oil is one of the biggest asset classes in the commodity segment and is traded world over. The volatility in crude oil prices is not good for global markets, Singhvi says.

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अनिल सिंघवी ने कहा- क्रूड की गिरावट से दुनियाभर के लिए मंदी के संकेत...
सबक लें ट्रेडर्स और निवेशक...#EditorsTake #CrudeMeltdown #OilCrash @AnilSinghvi_ pic.twitter.com/8joip36f5S

— Zee Business (@ZeeBusiness) April 21, 2020

Anil Singhvi' tip to investors is to avoid indulging in mindless investments in any asset class, including oil stocks. Overnight risk in global and Indian markets are currently high, not only in crude oil, but it could be gold, currency or even equity.

The traders as well as investors should know risk management and how to de-risk their portfolios as much as possible.

Going forward, settlement of crude oil futures will be watched closely at India’s largest commodity exchange, Multi Commodity Exchange, MCX said in a circular issued on Monday.
 
MCX April month crude oil contract, which expired on Monday, closed at Rs 965 at 5 p.m. MCX issued a late evening circular which said "Further to MCXCCL Circular No. MCXCCL/C&S/081/2020 dated April 15, 2020, due to the unprecedented price fluctuation in the international markets in Crude Oil, the due date rate for Crude Oil futures contract expiring on April 20, 2020 is under finalisation. In the interim, the provisional settlement price for April 20, 2020 is considered as Re. 1 per barrel for the computation of members’ obligation for trade date April 20, 2020.".

"Differential settlement, if any, on fixation of the final settlement price shall be done subsequently," it said.

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This was after crude oil price futures expiring on Tuesday in the US turned negative at -37.63 USD a barrel on New York Mercantile Exchange.