Enter the Craziest Day in Oil Market History

Source: Global Market Report

Late Sunday night in South Kensington, London, Manny Newman activated ten screens on her desk, preparing for what could become one of the most volatile trading sessions in oil market history.

Over the next 23 hours, the benchmark Brent crude price soared to $119 per barrel, then plummeted to $84, marking the largest intraday fluctuation on record when measured in U.S. dollars.

32-year-old Newman is a market maker at commodity trading firm Onyx Commodities, which continuously quotes buy and sell prices in the oil market. Even for an experienced trader, Monday’s chaos was unprecedented.

“I’ve been through many crises, including COVID-19, the Russia-Ukraine conflict, and the 2019 attack on Saudi oil facilities,” she said. “But none of those compare to yesterday.” She added that the trading pace felt like “playing video games nonstop for 24 hours.”

Onyx traders relied on electrolyte drinks, creatine powder, nicotine patches, and short naps to keep going. “We turned the conference room into a makeshift dorm, with sleeping bags,” she said. “Last night, I fell asleep listening to Trump’s speech, woke up at 3 a.m. to check the markets, and was up again by 5:30 a.m.”

The current level of risk is almost unprecedented. Onyx has 60 traders across London, Dubai, and Singapore, providing quotes for thousands of crude oil, diesel, and jet fuel contracts, most of which are linked to the oil benchmark price.

The price swings on Monday made this work extremely difficult.

The oil market was closed over the weekend, but after media reports that Saudi Arabia and the UAE had announced production cuts, and with tensions in the Gulf escalating, prices surged sharply at opening. Then, news emerged that governments were considering releasing emergency oil reserves, causing prices to fall significantly. President Trump later declared the conflict “completely over,” and prices declined again.

Greg Newman, co-founder and CEO of Onyx Commodities and Manny’s partner, said, “We witnessed unprecedented price volatility, and it’s easy to see how difficult it was to set quotes under these conditions.”

He also noted that the typical bid-ask spread—often just a few cents per barrel—widened dramatically to as much as $10, “because it was impossible to gauge market direction at the time.”

Newman explained, “We are one of the largest oil traders globally. Normally, a small error in quoting might cost around $10,000, but yesterday, a single mistake could have resulted in losses of up to $2 million.”

At that moment, the intense market swings overwhelmed many traders. “Some colleagues in the team said they had to pause because the price movements were so extreme, it was impossible to get a handle on what was happening,” he said. “When prices fluctuate so wildly, the chain reactions that follow are endless, and everything happens so suddenly that staying calm is extremely difficult.”

Newman also revealed that he spent the entire weekend arranging for 15 Dubai-based traders, along with their families and pets, to evacuate. They booked a flight from Marseille to Fujairah to pick up the team, refueling in Rome before returning to London. The traders arrived just in time to start work at market open.

One of Onyx’s core businesses is providing hedging services to oil producers, refineries, and trading companies, helping them manage the risks of price volatility. These transactions allow companies to lock in prices for future production or consumption.

Newman said, “Everyone is trying to lock in oil prices for different periods and regions. Refineries often want to secure profit margins between their crude oil purchases and finished product sales.”

The sharp rise in oil prices presents a great opportunity for producers to profit by selling forward contracts. “If oil prices go up by 20%, it can bring huge economic gains for producers. Even unextracted oil can earn an extra 20 per barrel.”

However, on Monday, the normal balance between buyers and sellers in the market broke down multiple times. When prices surged, buyers flooded the market, eager to lock in supplies at higher prices, but due to uncertainty, few traders were willing to take the other side of the trade.

When speculative traders began closing positions and exiting, the market suddenly reversed.

Newman believes that financial speculators now have a much greater influence on oil trading than before. “Nowadays, we have no idea who is behind some of these financial trades or what information they hold. They might enter the market aggressively, and you start to wonder: ‘Do they know something we don’t?’”

He added, “Unintentionally, the market’s trend has diverged from normal logic, and everyone is forced to exit because no one can withstand such price swings.”

Manny Newman, who manages Brent crude trading, said she heard that several funds suffered huge losses during Monday’s volatility and had to lay off their entire trading teams. She also mentioned, “Some trading firms are fully short, and life is very tough.” She warned that wrong bets and short squeeze scenarios could lead to devastating losses, sometimes in the billions.

She recounted a typical case: a hedge trade for Brent crude forward delivery that experienced extreme fluctuations within hours. “When we opened the position, the spread was $8, but by the end of the day, it was only $4.50,” she said. “That meant a loss of $25 million in just 10 hours—truly shocking.”

Amid the chaos, as uncertainty grew, market participants began to retreat and reduce their trading activity. “Trading volume plummeted,” she said. “Many trading mechanisms failed during this period.”

Despite Trump’s claims that the conflict would “end soon,” she expects her own sleep to remain restless for the coming weeks. “Even if the war ends today, the impact of this supply disruption will take at least 6 weeks to 2 months to gradually resolve. I believe oil prices will likely stay high for about 2 to 3 months.”