Late Sunday night in South Kensington, London, Manny Newman powered up the ten screens on her desk, preparing for what would become one of the most volatile trading sessions in the history of the oil market. Over the next 23 hours, the benchmark Brent crude price would first skyrocket to $119 per barrel, only to then plummet to $84, setting a record for the largest intraday price swing in dollar terms.
The 32-year-old Newman is a market maker at the commodities trading firm Onyx Commodities, which continuously provides buy and sell quotes in the oil market. Even for an experienced trader, the chaos witnessed on Monday was unprecedented. "I've lived through many crises, including the COVID-19 pandemic, the Russia-Ukraine conflict, and the 2019 attacks on Saudi oil facilities," she said. "But none of them compared to yesterday." She added that the pace of trading felt like "playing a video game for 24 hours straight."
The traders at Onyx sustained themselves with electrolyte drinks, creatine powder, nicotine patches, and short naps. "We converted the conference room into a makeshift dormitory with sleeping bags," she noted. "Last night, I fell asleep listening to a speech by Trump, woke up at 3 a.m. to check the markets, and was fully up by 5:30 a.m."
The stakes were almost unprecedentedly high. Onyx employs 60 traders across London, Dubai, and Singapore, responsible for quoting prices on thousands of contracts for crude oil, diesel, jet fuel, and other refined products, most of which are linked to crude oil benchmarks. Monday's extreme price swings made this task exceptionally difficult.
The oil market is closed on weekends. When trading opened after media reports on Sunday indicated that Saudi Arabia and the UAE had become the latest oil exporters to announce production cuts, prices surged dramatically amid escalating conflict in the Gulf region. Subsequently, news that governments were considering releasing emergency petroleum reserves caused prices to fall sharply. Prices dropped again following a statement from President Trump claiming the war was "completely over."
Manny's partner, Greg Newman, co-founder and CEO of Onyx Commodities, stated, "We witnessed unprecedented price volatility. You can imagine how difficult it was to determine quotes under such conditions." He also mentioned that the bid-ask spread, typically just a few cents per barrel, widened dramatically to as much as $10 because "it was simply impossible to gauge the market's direction at that time."
"We are one of the world's largest oil traders by volume," Newman explained. "On a normal day, a quoting mistake might cost ten thousand dollars. But a single error yesterday could have resulted in a loss of up to two million dollars." The intense market volatility even overwhelmed many traders. "Some team members explicitly said they needed to pause because the price movements were so large and confusing," he said. "When prices move so erratically, the ripple effects are endless, everything happens suddenly, and maintaining composure is extremely challenging."
Newman also revealed he spent the entire weekend arranging the evacuation of 15 traders and their families, including pets, from Dubai. He chartered an Airbus passenger aircraft from Marseille to Fujairah to pick up the team, which refueled in Rome before returning to London. The traders arrived just in time for the market open.
A core business for Onyx is providing hedging services to oil producers, refineries, and trading companies, helping them manage risks associated with oil price fluctuations. Companies use these transactions to lock in prices for oil they plan to produce or consume in the future. "Everyone was trying to lock in prices for oil at different times and in different regions," Newman said. "Refineries often want to lock in the profit margin between the crude they buy and the refined products they sell."
The sharp price surge presented a prime opportunity for oil producers, who could profit by selling forward contracts for future production. "If the oil price rises by 20%, it brings huge economic benefits for producers. Even for oil still in the ground, it means earning 20% more per barrel." However, on Monday, the normal balance between buyers and sellers broke down multiple times. When prices spiked, buyers rushed into the market, willing to pay higher prices to secure supply, but due to uncertainty, few traders were willing to take the opposite side of the trade. When speculative traders began closing their positions and exiting, the market sentiment reversed abruptly.
Newman believes financial speculators now wield far greater influence in oil trading than in the past. "Now, we often don't know who is behind some financial trades or what information they possess. They might enter the market with large positions, and you can't help but wonder: 'Do they know something we don't?'" He added, "Before you know it, the market moves defy normal logic, and everyone is forced to exit because no one can withstand such price volatility."
Manny Newman, who handles Brent crude trading, reported hearing that several funds had fired entire trading teams due to massive losses incurred during Monday's turbulence. "There were also a few trading firms that were heavily short and having a very tough time," she said. She noted that being on the wrong side of a short squeeze could lead to devastating losses, potentially amounting to billions of dollars.
She experienced a classic example firsthand: a trade designed to hedge against forward Brent crude delivery risk experienced extreme volatility within just a few hours. "The spread was $8 when we entered the position in the morning, but by the market close, it was only $4.50," she explained. "That meant a loss of $25 million materialized easily within ten hours. It was staggering."
Amid the market chaos, as uncertainty intensified, participants began to retreat, significantly reducing their trading volumes. "Trading volumes plummeted," she said. "There were numerous instances of market mechanisms failing."
Despite Trump's assertion that the war would end "soon," she expects unsettled sleep for weeks to come. "Even if the conflict ended today, it would take at least six weeks to two months for the disruptions to the supply situation to gradually resolve," she predicted. "I believe oil prices are likely to remain in an elevated range for approximately the next two to three months."
