Oil prices hit steep plunge yesterday
Federal regulators are looking into something strange that happened yesterday in the oil markets: Prices plunged more than $3 a barrel in less than a minute.
“We know what happened wasn’t due to any major news event,” Marketplace’s Stephen Beard points out. But it is hard to find alternative reasons for the plunge as well. One theory, he says, is so-called “fat-finger syndrome” — otherwise known as human error.
“Error is a possibility,” says Nick McGregor of brokers Redmayne-Bentley, “but it would have to be a very significant error to have seen the volume which we saw in this contract — nearly double in the course of a couple of hours.”
Some analysts in the U.S. say it must have been high-frequency trading, adds Beard.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
