A spike in oil prices to their highest level this year on Tuesday was caused by a rogue broker, Steven Perkins, who placed a massive bet in the Brent oil market, triggering almost $10m (€7m) of losses for his company, PVM Oil Associates.
Prices rose in one hour from $71 to $73.5, the highest level for the year, according to FT. In total, futures contracts for more than 16m barrels of oil changed hands in that hour – equivalent to double the daily production of Saudi Arabia, the world’s largest oil producer, and far more than the traditional 500,000 barrels for that time of the day
Assuming it was intentional, he was probably hoping to trigger buy stops. At 1,000 barrels per contract, the volume traded was 15,000 contracts. If he was responsible for 1/3, the $10 M only represents a 2 point loss, which is very lucky. The fact that the price did not go much higher was pretty bearish at that moment.
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