In a sign of the times, a false twitter rumor on Monday about the death of Syrian president Bashar Al Assad caused a spike in many energy related commodities, including Brent and WTI oil futures. Even after the rumor was dispelled, the momentum carried over to today where energy based commodities continued to gain. Brent Crude front month contracts are now up 2.9% for the week and WTI Crude now sits at $93.25/barrel after gaining 2.3%. Here's the top 10 performers in the commodities space week to date:
This article on Mashable.com provides some additional details as well as a timeline surrounding the 'embellished' tweet.
The market was quick to respond. Just 16 minutes after the first tweet, futures for light, sweet crude started to increase, topping out at $91.99 a barrel by 10:45 a.m.
“A well-placed story can move the market, and that looks like what happened,” Price Futures Group Analyst Phil Flynn told The Wall Street Journal.
Oil prices closed at $92.20 on the New York Merchantile Exchange. According to WSJ, it’s the highest settlement price since July 19.
Here's a line chart of Natgas, Brent and WTI futures at 15 minute granularity going back to Sunday evening. The impact of the rumor hits about 1/3 of the way into Monday the 6th. Interestingly, the price gains in WTI and Brent were higher today then they were yesterday.
These types of shenanigans are the last thing that the ECB and the Fed need right now. Many global equity markets are in the midst of a nice little uptrend right now,
thanks in large part to the perception that the ECB's printing press is all warmed up and ready to go. We've long held the opinion that the primary metric that gives central banks pause when considering additional liquidity is the price of oil. Brent over 120 and/or WTI over 100 seems to be (roughly) the border of the danger zone.
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