The price of oil slipped below $96 a barrel last week – taking a $3 plunge within 60 seconds, erasing the gains made the previous when the Federal Reserve unveiled new steps to boost the U.S. economy with QE3.
Traders were unsure of the cause of the plunge. Some wondered whether an errant trade or another rumor about a release of oil from the Strategic Petroleum Reserve was to blame.
What I told CNBC on the Closing Bell was that I personally think what we saw was volatility arising from the expiration of October options contracts could have been exaggerated by the lower trading volume that occurred Monday due to the observance of a Jewish holiday Rosh Hashanah.
Any time you take a significant segment out of the market, liquidity does dry upand you can get moves like this.