Sign in Subscribe
Petroleum industry

Oil Prices Plummet on Misleading News, Market Fails to Recover

Strategic Insights

— 1 min read

The oil trading community's misinterpretation of a news wire about the release of Moshood Abiola on bail led to a sharp decline in West Texas Intermediate (WTI) crude oil futures, with prices plummeting over $1/bbl on the New York Mercantile Exchange (Nymex). The market failed to recover even after the true story emerged, with WTI closing at $19.31/bbl, down 83* on the day.

Key Takeaways:

  • The oil workers' strike in Nigeria, led by pro-democracy leaders, remains in full force, despite the military rulers' attempt to quiet pro-democracy demonstrations and strikes throughout the country.
  • Moshood Abiola, the apparent winner of the annulled presidential elections in June 1993, remains in prison awaiting trial for treason.
  • The bail offered to Abiola contained conditions that he rejected out of hand, leading to widespread condemnation from pro-democracy leaders.
  • September West Texas Intermediate (WTI) crude oil futures for September delivery plummeted over $1/bbl on the New York Mercantile Exchange (Nymex) after the initial news bulletin.
  • September North Sea Brent futures closed at $17.85/bbl, down 56* on London's International Petroleum Exchange.
  • September refined products prices also took a hammering, with September No. 2 heating oil futures tumbling 2.87*/gallon to 49.18*/gallon.
  • Unleaded regular gasoline futures for September delivery to New York Harbor plummeted 1.93*/gallon (81/bbl) due to the market's misinterpretation of the news wire.
  • Wholesale product prices, however, rose across the board, with Unleaded regular gasoline rising 0.20* to 67.03*/gallon.

Statistics:

  • West Texas Intermediate (WTI) crude oil futures for September delivery plummeted over $1/bbl on the New York Mercantile Exchange (Nymex) after the initial news bulletin.
  • September North Sea Brent futures closed at $17.85/bbl, down 56* on London's International Petroleum Exchange.
  • September No. 2 heating oil futures tumbled 2.87*/gallon to 49.18*/gallon.
  • Unleaded regular gasoline futures for September delivery to New York Harbor plummeted 1.93*/gallon (81/bbl).
  • Wholesale product prices, however, rose across the board, with Unleaded regular gasoline rising 0.20* to 67.03*/gallon.

Sources:

  • "Washington Post"
  • "New York Times"

Read more