Traders placed half-a-billion-dollar bets on the oil market approximately 15 minutes before US President Donald Trump's post about "productive" talks with Iran caused oil prices to fall and triggered volatility in other assets, the Financial Times reports, writes UNN.
Details
Approximately 6,200 futures contracts for Brent and West Texas Intermediate crude oil were traded between 6:49 and 6:50 AM New York time on Monday, just a quarter of an hour before the US President's social media post stating that "productive talks" had taken place in recent days. The nominal value of these trades was $580 million, according to FT calculations based on Bloomberg data.
Trading volumes for Brent and WTI surged simultaneously, 27 seconds before 6:50 AM. Futures tracking the S&P 500 stock index sharply increased in price immediately after the oil trades, with volumes also significantly rising during this period, the publication writes.
"It is unknown whether a single entity or several are behind Monday's trades," the publication states.
Trump's statement at 7:04 AM triggered a sharp decline in global energy markets and jumps in S&P 500 stock index futures and European equities, as investors reduced bets on a prolonged conflict.
"These timely deals echoed a wave of large, highly profitable bets made on the Polymarket prediction market regarding the timing of US attacks on Iran and Venezuela in recent months," the publication notes.
"It's hard to prove causality… but the question arises as to who would be relatively aggressive in selling futures at that moment, 15 minutes before Trump's post," said a market strategist at an American broker, commenting on Monday's deals.
White House Press Secretary Kush Desai stated: "President Trump and Trump administration officials are focused solely on what is best for the American people."
He added: "The White House does not tolerate any administration officials illegally profiting from insider information, and any claims that officials are engaging in such activities without evidence are baseless and irresponsible reporting."
Several hedge funds noted that this is one of numerous examples of large trades made in recent months prior to official US government announcements.
One trader at a large hedge fund said that energy consultants recently noticed several large trades that they believed were made at an exceptionally opportune time. Another portfolio manager said that the series of large and timely trades caused "a certain level of frustration" among investors.
"My gut feeling, based on observing markets for the past 25 years, is that this is really abnormal," he added. "It's Monday morning, there's no important data today, no Fed speakers to get ahead of. This is an unusually large trade for a day with no event risk… Someone just got significantly richer."
In a post on X later on Monday, Iranian parliamentary speaker Mohammad-Bagher Ghalibaf denied any talks between Washington and Tehran, which caused a correction in global stock markets and new purchases in energy markets.
He added: "Fake news is being used to manipulate financial and oil markets and to get out of the quagmire in which the US and Israel find themselves."
One commodities trader said that the sales of oil futures were not huge compared to the volumes in a market that was very active even before the war, but he noticed a sharp movement in TTF, the European gas benchmark, around the same time.
Tim Skirrow, head of derivatives at the consulting firm Energy Aspects, said: "This is a larger than usual volume [for Brent and WTI] than I would expect at this time of day, but at the same time, it's not excessively large. I find it a bit difficult to put it all together."
He added that Brent futures and options markets have seen "significant inflows" from funds in recent weeks. "Given the price reaction, it seems almost everyone was long. This is almost a necessary precursor for such a violent move."