Commodities: Traders scratch their head over late sell-off. Fat finger?
Tue 18 Sep 2012
LONDON (SHARECAST) - US crude oil futures fell sharply in a late selling frenzy following rumours of a possible Strategic Petroleum Reserve release.
However a White House official confirmed that the administration has no plans to release oil from the Strategic Petroleum Reserve.
At one point crude fell as much as $3 in less than a minute (a bit before the expiry of options on the October contract), sparking concern that there was a technical issue on Nymex. However CME Group said "technical issues" did not cause the sell-off, leaving traders at a loss on how to explain the heavy decline; with some going as far as to suggest a "fat finger" may have triggerred the fall.
Crude oil futures settled down $2.38, paring some losses at $96.62 a barrel on the New York Mercantile Exchange. It was the lowest close in a week.
The selling scramble prompted the Commodity Futures Trading Commission's surveillance team to gather trading information on the unusual price moves.
On the ICE futures exchange Brent crude settled $2.87 lower at $113.79 a barrel.
Monday's slump follows a two-day advance on the back of heightened tensions in the oil-rich Middle East and North Africa. Oil has also rallied in the last few weeks following fresh stimulus measures by the Federal Reserve and the European Central Bank.
Among precious metals gold's recent winning streak petered out on Monday, as did gains amongst other precious and base metals.
Gold for December delivery fell $2.10 to settle at $1,770.60 an ounce on the Comex division of the New York Mercantile Exchange.
Silver for December delivery declined 29 cents to close at $34.37 an ounce while platinum for October lost $41.10 to $1,672.60 an ounce.