Oil Traders Misread Tweet, Make Oil Prices Shoot Up
from the read-slower dept
There have been plenty of complaints about people who jump to conclusions too quickly online, but apparently at times that can actually have a material impact on things. Earlier today, the Israeli Defense Forces (who have been quite active on Twitter) put out a tweet commemorating the famed Yom Kippur war of 1973, in which Israel bombed Syria:
Oct. 10 #YomKippur73: Israel Air Force bombards airports in Syria to prevent Soviet weapons reaching the Syrian Army http://t.co/tKnMzYjgFF
— IDF (@IDFSpokesperson) October 10, 2013
Of course, the article notes that traders eventually realized their mistake… but the price of oil stayed up, rising over a dollar from $110.40 a barrel to $111.50 a barrel, and then continuing to rise a bit (though more slowly) after the mistake was understood. Isn’t it great that key pieces of the global economy can change based on some people totally misreading a tweet? Makes me feel so comfortable about the state of the world today.
Filed Under: israel, misreading, oil prices, reading comprehension, syria, twitter
Comments on “Oil Traders Misread Tweet, Make Oil Prices Shoot Up”
Yeah...
This goes into the WTF folder.
Re: Yeah...
High speed trading algorithms. They have a certain amount of trust set for certain Twitter accounts and keyworded on bomb and Syria.
Instant buy commands sent.
Big deal. 2001 when Bush came in, oil was under $50.
So going to war in Iraq to guarantee the “free flow of oil at market prices” costs you at least a $1.50 every gallon, from now on.
sORRY
OIL AND UTILITY ITEMS SHOULD NOT BE ON THE MARKET..
They should NOT be products bought and sold until they HIT a top price.. THIS is middle men fighting over WHAT THEY THINK they can charge.
Look up the price of SUGAR on the market..now goto the STORE and see how much markup you are paying. AND sugar is a CLOSED MARKET.(HIGH IMPORT tax)
there are to many MIDDLE MEN..
Re: sORRY
OIL AND UTILITY ITEMS SHOULD NOT BE ON THE MARKET..
What’s the alternative, government setting the price?
Re: Re: sORRY
nASCH..
Its called BUY IT, add your markup 1 time and sell it..
NOT BUY AND SELL back and forth 4-10 times until its over priced. Do you KNOW the actual price of OIL in most countries? the Price the CORP pays? then sells it AGAIN, and that company sells it AGAIN??
I wont tell you, as it is very hard to find..and I havnt seen it in 5 years. I will say that its NOT $100 per barrel. its NOT $50..
The stock market IN THE OLD days had 2 things going for it..
1. it was ON FARMING GOODS..
2. you had to TAKE possession of the GOODS before you could sell it.
Potatoes in the USA are
Re: Re: Re: sORRY
oUTRAGEOUS..
DID YOU KNOW that 80-81 per CENT of oil CORP industry profit funds the MEXICAN JEW LIZARD PEOPLE responsible for U.S. govt shutdown?? MSM dosnt want YOU to KNOW..! thank god for infowars.com
RAND PAUL discovers one weird TRICK to HARVEST OIL ($$$) from your own hair! Wake up sheeple
Re: Re: sORRY
Right, because we all trust the well-reasoned, carefully thought out, good mistakes of government officials as compared to the irrational badmistakes of private individuals.
Re: Re: sORRY
The oil commodity market was created so airlines could stabilize the costs of fuel. Now it is controlled by the traders who often trade in”dark markets” without any transparency or external controls.
Make the traders take possession.
And make retail prices run on a 100 day average.
Speculation would disappear overnight!
Re: Re: Re: sORRY
There are to many middle men.
Oil corps will tell you, the reason they sell OIL over many other products, is that ITS CHEAP.
You should understand what a cracking tower does..
It takes a Liquid as thick as molasses..and coverts it to Liquids, gases, and solids.. by the time they are DONE..its at LEAST 100 to 1.
Got a refillable lighter..look at the price, and THAt isnt a gallon.
Propellant in most Spray cans..1oz in 16, and most of the price is in propellant.(look on a shelf to the Straight liquid you MIX GALLONS)
I wont mention Plastics, roofing, ROAD TAR, and all the rest..
Even if they sold that 55gallon drum at $1 per gallon, after processing, it would be worth over $5500. they make LOTs more then that. GAS pays for the whole thing and the rest is PURE PROFIT.
Your electric company SELLS electricity..They MOSTLY dont make it. thats ANOTHER company.
They sell it back and forth, until it wont go up anymore and have to use it..Then CHARGe the customer for all the games. along with PROFIT.
If you could BUY direct from the farmer you would pay about $3 for 100 pounds of potatoes..
Even if you could Buy direct from the original food processor..It wouldnt even TOUCH $0.50 per pound..
Re: Re: sORRY
Commodities or futures contracts should be there for the producer to be guaranteed a market. You should not be allowed to sell the contracts once you’ve bought them. Once you agree to buy a future contract, you should be obligated to take delivery of the goods.
There is no society benefit to trading the contracts. All it does is cause the price to go up. There is no value to anyone there, other than the traders who manage to skim price differentiation.
I’m sure GS can give us a nice rationalization of how this practice gives the market liquidity or some other nonsense (AKA front running… sorry, I meant high frequency trading).
Soviet
(and the reference to the Soviet Union — a country that hasn’t existed in decades)
It didn’t refer to the Soviet Union, but “Soviet weapons”, and there are still plenty of those out there.
Re: Soviet
That’d be Soviet era weapons not Soviet weapons, given the Soviet Union does not exist to own any weapons.
Well, whaddaya know. They’ve finally found a new excuse for a rise in oil prices.
Try again Reuters
“Front-month Brent crude prices rallied from $110.40 a barrel at 10:20 a.m. EDT — just before the Tweet — to as high as $111.50 just after 11 a.m., as trading volumes rose. By 1 p.m. oil was up $2.68 a barrel to $111.74, its highest in a month.”
If at one point was up 2.68 to 111.74, then it opened at 109.06. Further, if trading opens at 9am, then in the first hour – BEFORE THE TWEET – it was up 1.23%. In the hour after the tweet, it went up almost exactly 1%. In other words, there is absolutely no evidence to suggest that the tweet had any effect on the prices.
This seems like a ‘blame the scary technology’ article more than any real story.
See also
Re: Try again Reuters
Oops, left off my closing argument:
http://markets.ft.com/research/Markets/Tearsheets/Summary?s=IB.1:IEU
(May have to change view to 3 or 5 days to see the recent trend)
There is no spike in the price at the time of the tweet, and the only rise for the first part of the day was correcting for the previous day’s downturn at the end. Once again, no story.
I’ve said it for years: we have not lived in a free market system since the 30’s. Every bag of wind howling and heaving about “duh free market!” and “muh capitalism!” is a useful idiot at best and a politician at worst.
It is like this with every commodity. The prices aren’t even mathematically soluble to give the greatest profit. They’re merely fabrications that are made “within reason” to trick people into thinking some form of global trade system is at work and not a collection of ultra-influential traders pulling numbers from a hat that become the price of goods and services that we need to function as a society. If they reflected their actual values, the cost of living almost everywhere would plummet.
Re: we have not lived in a free market system since the 30's
Thank you!!
Ya hear that, Big L’s?
No amount of pretending it is true and acting like it’s true is gonna make it true!
In the words of one of my former options trading gurus
Sell! Sell! (short) Betting on the backlash…
Speculation. It should be a crime.