Slashdot Mirror

← Back to Stories (view on slashdot.org)

Oil Traders Misread Tweet, Oil Prices Spike

Posted by timothy on from the where-the-humans-come-in dept.

cartechboy writes "Ahh Twitter. Sometimes when you combine lightning fast information distribution and humans, minor (or not-so-minor) chaos can ensue. Yesterday, the Israeli military tweeted a commemoration of the 40th anniversary of the Yom Kippur war, which took place in 1973. But the tweet referenced the bombing of Syrian airports by Soviets, and oil traders, already an antsy group, assumed the tweet referred to an attack occurring that very moment. As you can imagine, this had some impact. Within an hour, the global price of oil jumped more than $1, from $110.40 to $111.50 as trading volumes soared. In the end, the traders missed a few things that would identify the tweet as historical vs imminent: Yom Kippur was weeks ago, the Soviet Union is no more, and most important, #checkthehashtag."

8 of 91 comments (clear)

  1. #idiots by Anonymous Coward · · Score: 5, Insightful

    Anyone getting their investment advice from Twitter deserves what they get.

    1. Re:#idiots by jonbryce · · Score: 4, Insightful

      A $1 movement in oil price is just noise as far as real buyers of oil are concerned. In any case, they buy their oil on the futures market, not the spot market.

    2. Re:#idiots by Anonymous Coward · · Score: 3, Insightful

      Then short oil futures. If you are so sure its a bubble, it will come crashing down and you can make money off of it. If you don't short oil, it shows you don't have confidence it is a bubble and that maybe the price is up there for reasons you don't fully understand.

      I have used this strategy before and made a killing from it. Many times things are bubbles or wrongly smeared in the news and you can buy/sell and put your money where your mouth is. I personally wouldn't short oil because there are things that cause its current price that I don't know. Since you are an expert you should have no hesitation in doing so, if you don't that shows you are not the expert you think you are.

      Not trying to be snarky, but trying to make the point that you can run your mouth off for free without consequence.

    3. Re:#idiots by thegarbz · · Score: 4, Insightful

      Proven reserves are variable and depend on price. i.e. if the price of oil dropped down to $50/bbl then it's no longer profitable to crack tarsands and the so called proven reserves go down.

      The high proven reserves are part of the high dollar. A lot of this stuff is either shit (sour, acidic, heavy) or is in hard to reach places which would be worthless if the the dollar wasn't lower. This is the same reason why "peak oil" would never actually resemble a peak.

  2. Re:Trading term by Anonymous Coward · · Score: 5, Insightful

    "I just wish I could get in on more of these mis-pricings on time,"
    That would make you a twitchy day-trader.

  3. #idiots by quonsar · · Score: 4, Insightful

    lightning: electrical discharges in the atmosphere.
    lightening: what happens just before dawn.

    --

    Sacred cows make the best burgers.

  4. Re:Trading term by Ol+Olsoc · · Score: 4, Insightful

    The stock market always goes up in the long term.

    Oh yes.

    Even if it drops for a year it'll be fine. I won't be taking money out until I retire, and that won't be for at least another 25 years... it's best to not pay attention, in my opinion.

    That's a little simplistic. I know many folks who were just about wiped out, right around the time they retired. Yes, the market always goes up. And that is an awesome investment strategy if you are going to live for 200 years. For us mere mortals, where it's at when we retire - or move it into less volatile investments is much more important.

    If you plan on moving your investments into something more conservative at some point, where is the market going to be at that point? I know one fellow who hung on a bit too long, and was bit hard twice.

    I lucked out and went conservative pretty early on - way too early for most. I was an imbecile for about a decade. Sad to say, my smart colleagues who knew the market only went up in the long run are now planning on working into their 70's. Hopefully they will be allowed to do that. Me, I retired on my terms at 56.

    Invest well, save well, live well, but well below what the economic forces tell you to.(real estate people, investment people, banking people) Pay attention to your stocks. Constant monitoring is only a problem if you get greedy, and too many people cannot not be greedy. The vampires and leeches feed on that greed, and do a slam bang job of extracting your wealth.

    --
    The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
  5. Actually Related to Debt Ceiling Increase by Azaril · · Score: 4, Insightful

    I'm not sure where this came from. Speaking as an oil trader, the spike was entirely the result of Boehner's speech offering a temporary debt increase. I do have several twitter feeds open to guage news sentiment, but the IDF's isnt one of them. Did the Israelis find a ton of oil i was otherwise unaware of?