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eToro transforms into an exchange! Play anything, FTX launches crude oil futures index

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eToro transforms into an exchange! Play anything, FTX launches crude oil futures index

According to the latest announcement from the FTX exchange on the 22nd, this emerging exchange has once again caught up with the hot topic of WTI crude oil futures falling to zero and even negative value, by launching oil contract products. The exchange continues to innovate its product offerings, with attention-grabbing products related to the presidential election, Shitcoin, and more. Previously, they introduced leveraged tokens, but these were delisted by Binance citing "difficult for users to understand."

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According to the latest announcement from the FTX exchange on the 22nd, this emerging exchange has launched oil contract products following the trend of WTI crude oil futures dropping to zero and even into negative values. The exchange continues to innovate with products related to hot topics like the presidential election and Shitcoin, having previously introduced leveraged tokens which were delisted by Binance due to "user comprehension difficulties."

The oil contract products are based on the recent attention-grabbing WTI crude oil spot price, with slight variations provided to trading users. To avoid negative values, the oil price is presented with an additional $100.

FTX indicates using WTI price as the basis

This product has also caught the attention of Larry, the research director at The Block. He mentioned that despite his reservations about FTX, it is like the early days of Binance, able to launch products at an incomparable speed.

On April 20th, for the first time since 1999, WTI futures prices dropped below $15, with the May contract even going into negative values, indicating extremely low demand. Additionally, according to data from the U.S. Energy Information Administration, U.S. automotive oil production supply is significantly lower than the five-year average. It seems that neither the agreement between Russia and OPEC to reduce oil production nor the reduction in U.S. shale oil extraction can save oil prices, as global demand has plummeted due to the pandemic.

It is important to note that negative values in crude oil futures do not represent actual crude oil trading prices but are due to tanks being full. According to analysis by the Facebook figure "Weng Darui" on the 20th, "If oil companies purchase crude oil futures for May delivery, there will be no storage in the tanks. Therefore, the buying interest for WTI crude oil futures for May delivery has vanished."

He explained: "Helplessly, oil companies have to spend money to have the excess crude oil transported away. This is the reason why the price of WTI crude oil futures for May delivery turned 'negative.' The lowest price today is minus $34, indicating that it costs up to $34 to transport a gallon of crude oil from the oil field.
All this has 'nothing to do' with global crude oil prices! The collapse of WTI futures prices today is simply because the storage tanks are full. That's all!"

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