Oil prices hit steep plunge yesterday

Stephen Beard Sep 18, 2012
HTML EMBED:
COPY

Oil prices hit steep plunge yesterday

Stephen Beard Sep 18, 2012
HTML EMBED:
COPY

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.

 

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.