• A group of UK traders accused of market manipulation and making $700 million from the 2020 oil price collapse will go to trial, reports said.
  • WhatsApp messages between the "Essex Boys" apparently showed them discussing how to push oil futures prices down.
  • In April 2020, the price of US crude oil cratered to below zero for the first time in history.

A group of UK traders known as the "Essex Boys" will face trial in the United States over the crash in the oil market in 2020 that netted them $700 million, according to media reports on Wednesday.

A US district court judge has given the green light for a case to proceed against eight traders from Vega Capital London, a fund whose employees were largely based in the eastern English region of Essex, for manipulation of crude oil futures, according to court documents and Britain's Guardian newspaper.

A lawyer for Vega Capital did not immediately respond to a request for comment from Insider.

On April 20, 2020, oil plummeted into negative territory for the first time as the Covid pandemic sent demand for fuel plunging and caused an oversupply of unused fuel in the market that threatened to overwhelm existing US storage facilities. WTI oil crashed to -$40 in the run-up to the benchmark monthly futures contract expiring. It subsequently recovered and is now currently trading at around $103 per barrel.

According to the suit, several of the traders' transactions on April 20 were "highly correlated," with between 96.2% and 99.7% moving "in the same direction at the very same time." Between 1 and 1:30 p.m., when the market closed, the eight traders were apparently responsible for 29.2% of the total volume in WTI crude oil futures, according to court documents, as reported by Bloomberg.

The documents showed that on that day, one of the traders sent their colleagues a WhatsApp message saying, "We pushed each other so hard for years for this one moment…" with another trader messaging to say, "Please don't tell anyone what happened today lads x."

Other messages had one trader saying, "Just keep selling it every 5 points," with another saying, "You've just got to keep selling."

"I wanna see negative WTI prices," another trader said, according to the court documents.

"The content of their communications, along with the high degree of correlative trading among most of them, give rise to a highly plausible inference of an agreement among them," judge Gary Feinerman wrote in his order, which included excerpts of messages between the traders, according to Bloomberg.

The lawsuit against the traders was brought by US coin, metals and jewellery dealer Mish International Monetary, which said it lost money when the price tumbled. The judge dismissed the case against four of the original 12 traders but subsequently allowed it to go ahead for the remaining eight.

Read the original article on Business Insider