This price action in the front month WTI futures contract was likely due to the USO ETF rolling their position. |USO owned 25% of the outstanding volume of May WTI oil futures contracts as of last week. With that contract set to expire Tuesday, the buyers of that “paper oil” have to sell or take physical delivery at the end of May. ETFs like USO are not created to take physical delivery of the oil contracts they hold, so in a long squeeze, the fund’s managers have to dump oil.
I just did some digging into this and it appears not to be true. USO rolled all of their May contracts to June contracts between April 7th and 13th. All of the speculators and funds have been out of the May contract for at least 8 days. This selloff was likely driven just by spot traders who were unable to take delivery on a contract that expires tomorrow.