Crypto Exchanges Fill Weekend Gap for Oil Traders
The traditional oil market's reliance on Friday closures and weekend risk management is giving way to a new habit - one facilitated by cryptocurrency exchanges.
Oil traders are increasingly turning to perpetual futures on crypto platforms to hedge against potential geopolitical risks over the weekends, thanks to their 24/7 trading availability. This shift has led to a significant reduction in the 'Friday discount' seen in WTI crude oil options, which measures the difference between Friday and Monday prices.
A report from Energy Aspects notes that this discount is narrowing, while data from Hyperliquid shows open interest in oil-linked contracts on its decentralized exchange reaching $1.2 billion on March 8 - a record high.
CME Group CEO Terry Duffy emphasizes the importance of remaining vigilant at all times, stating 'Risk doesn't know what day of the week it is.'