Rumors of a hedge fund collapse helped send oil yesterday to its worst day of the year so far.
The price of crude oil dropped more than $2 per barrel late yesterday morning amidst word that a troubled hedge fund was liquidating big commodity positions. The sharp decline appeared to be the result of multiple sell-stop orders triggered in rapid succession.
Oil prices had been up $10 per barrel during the first six weeks of the year.
"We hadn't seen a move like that in quite some time, so the move seemed pretty legit" MMC Trading's Matthew Cacciotti told Forbes. "10,000 lots traded in a minute, then some moments later we saw another 6,000 lots, that feels like a liquidation."