From The Telegraph:
PVM Oil Futures trader Steve Perkins bought 7m barrels of crude in late-night trading binge on his laptop, driving the oil price to an eight-month high.
It's probably not uncommon for City traders to wonder how they burnt so much cash during a drunken night on the town.
But Steve Perkins was left with a bigger black hole in his memory than most when his employer rang one morning to ask what he'd done with $520m of the oil trading firm's money.It was 7.45am on June 30 last year when the senior, longstanding broker for PVM Oil Futures was contacted by an admin clerk querying why he'd bought 7m barrels of crude in the middle of the night.The 34-year old broker at first claimed he had spent the night trading alongside a client. But the story began to fall apart when he refused to put the customer in touch with his desk for official approval of the trades.
By 10am it emerged that Mr Perkins had single-handedly moved the global price of oil to an eight-month high during a "drunken blackout"....MOREHT: MarketBeat
During the Sept. 17 rout of the longs 10,000 WTI contracts and 13,000 Brent were sold in one minute.
As each contract cover 1000 barrels, that's 23 million barrels, a bit more than Mr. Perkins was messing with.
Nanex CEO Scott Hunsadfer said "There was most likely a large fundamental seller in the market yesterday" while FT Alphaville's Izabella Kaminska said she was hearing whispers that the trades were options related.
My comment intimated that it was Saudi Arabia.
Note there was no mention of fat fingers.How did we know? There was no price uptick to indicate that some trading desk was trying to reverse the sells.
All three suppositions could be correct as the easiest way to use other peoples money is to buy the puts-on-futures and force the options writers to hedge by selling the futures. If the initial option trade was initiated by a major oil producer, well, we've squared the circle.
The CFTC and Britain's FSA are investigating but my best guess is we hear no more about the selling that day.