Sudden market activity raises questions
Minutes before Donald Trump’s announcement that the planned US strike on Iranian nuclear sites would be delayed, oil markets experienced unusual activity. Before the announcement, traders placed oil contracts worth hundreds of millions.
Data from the market shows that trading volumes spiked sharply 15 minutes prior to an announcement. Analysts and investors have expressed concern about this timing.
Following the announcement, oil prices drop.
Oil prices fell quickly after the announcement. Within minutes, the price dropped by 14%. The traders who correctly predicted the price drop were able to make significant gains.
Shortly, the benchmark US oil price reached $84 per barrel. Global stock markets rose as tensions seemed to be easing.
Unusual Trading Patterns Detected
The New York Mercantile Exchange has seen a sharp increase in trading activity. In just one minute, the number of trades for WTI crude oil contracts jumped from 733 up to more than 2,000. The value of this trade is approximately $170 million.
Brent crude traded in a similar fashion. In a single minute, contracts jumped up from 20 to 1,600 trades worth $150 million.
This level of activity, analysts say, is unusual for this time of day and especially when there are no public reports.
The Insider Trading Concern
Some speculate that traders might have traded on private or early information. Experts in the financial field have called on a possible insider trading investigation. The regulatory bodies of the US and UK were contacted to review further.
Background: Market volatility and rising tensions
The tensions in the Middle East are causing strong moves in global markets. Fears about supply have caused oil prices to rise, and stock markets are volatile.
Donald Trump had warned Iran earlier that there would be serious consequences for Iran if it did not open the Strait of Hormuz. Nearly 20% of the world’s oil is transported through this route.
At first, the markets reacted in a negative way. Oil prices fell and stock values recovered later on due to hopes for diplomacy.
Iran denies talks
Iranian officials denied any claims that negotiations had taken place. The Iranian officials called the report false and said that the US was trying to manipulate markets.
The Asian stock markets showed a slight rebound the following day.
