Questions have been raised over potential insider trading after hundreds of millions were bet on oil markets just minutes before Donald Trump said the US would postpone strikes on Iranian energy infrastructure.
On Monday, Trump claimed in a post on Truth Social that there had been “productive conversations” with Iran about ending the conflict between the two sides.
This sent the price of crude oil tumbling following weeks of price rises due to the fact the Strait of Hormuz has been effectively blocked, causing major disruption to oil shipping.
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But in the 15 minutes before Trump’s post, some $580mn in oil bets were placed by traders, who quickly made huge sums of money as oil prices fell and stocks bounced.
The Financial Times reports that around 6,200 Brent and West Texas Intermediate futures contracts changed hands between 6.49am and 6.50am New York time.
At the same time, trading volumes for Brent and WTI jumped, along with futures tracking the S&P 500 share index.
BBC News reported similar anomalies in trading volume, in terms of bets on WTI crude oil contracts and traders buying contracts for Brent crude.
Market experts have suggested the incredibly lucky timing of the bets is in fact the result of insider trading.
“You have to wonder who would have been relatively aggressive at selling futures at that point, 15 minutes before Trump’s post,” a market strategist at a US broker told the FT.
One trader at a major hedge fund told the publication: “My gut from watching markets for the last 25 years is this is really abnormal.
“It’s Monday morning, there’s no important data today, there aren’t any Fed speakers you’d want to front run. It’s an unusually large trade for a day with no event risk… Somebody just got a lot richer.”
Rachel Winter, a partner at the wealth management firm Killik & Co, told the BBC she hoped there would be “some sort of investigation” into potential insider trading.
“”Just before he posted on social media, quite a lot of people took out contracts that would allow them to profit from the oil price falling,” she said. “So there has been some speculation about insider trading.”
And Mukesh Sahdev, chief oil analysts at XAnalysts, said the huge volume in bets placed on the price of oil going down “appears abnormal for sure” and “raises questions.”
Sky News’ economics editor Ed Conway also discussed the unusual trading patter, asking whether it was “luck or insider information.”
We’ll let you draw your own conclusions…