Oil spikes $5 on rumors of Iran attack

[Jcrowley]

Source: CNN Money

Oil spikes $5 on rumors of Iran attack
After-hours contract briefly jumps 8 percent on rumors that Iran fired on U.S. warships; navy denies story, crude falls from highs.
March 27 2007: 9:15 PM EDT

NEW YORK (CNNMoney.com) -- U.S. crude futures briefly spiked over $5 a barrel in electronic trading late Tuesday on rumors that Iran fired on U.S. Navy warships. Crude gave up most of those gains according to one trader after reports of a confrontation were denied.

U.S. light crude for May delivery jumped $5.18, or about 8 percent, to $68.91 a barrel in electronic trading before giving back most of those gains to trade at $64.40 a barrel, $1.47 above Tuesday's settle price on the New York Mercantile Exchange.

"We have no information at this time that an incident has taken place in the Gulf," Gordon Johndroe, a spokesman for the National Security Council, said about reports of a confrontation between Iran and U.S. Navy warships.

"This just illustrates how this market is on tenterhooks regarding the situation in the Gulf," said Andy Lebow, a broker at Man Financial in New York.

Read more: http://money.cnn.com/2007/03/27/markets/oil_spikes/index.htm?postversion=2007032717

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Cui Bono?

[Just-plain-Kathy]

1. Well, isn't this what the war is all about?

So sad.

[onehandle]

2. Sounds like Chevron is starting a viral campaign.

(Whisper, Whisper) = Millions overnight.

Nice.

[whistle]

3. Right on queue and according to Big Oil's and Dick Cheney's plan

[Lucky Luciano]

4. Yes...I saw this before live...was crazy...

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=516869&mesg_id=516869

There were two rumors I was getting at the time. The first was the obvious one that Iran was getting attacked. Antoher rumor was that some knucklehead trader at JP Morgan fatfingered a trade (eg instead of buying 100 contracts, accidentally buying 1000 or 10000) sending the price skyrocketing - especially since markets are very thin afterhours. These fuckups can and do happen from time to time (look up Mizuho's collosal fuckup last year where they sold 600000 shares of a stock for one yen instead of what they really meant - sell 1 share for 600000 yen - they lost $225M because of this!!!!!!!!!!). Then perhaps they started the Iran rumor (or one can easily imagine people inferring this independently and the rumor mill gets going) so that they could support the price while they exit their moron position with minimal damage. Nobody really knows what happened though. Right now it is only up 90 cents from the close.

This, along with Beazer Homes (BZH) being investigated for fraud sent S&P Futures tumbling in after hours. BZH was off 5 bucks in afterhours trading and their credit default swap was wider by 150-200 bps on the day - crazy...it brought the credit spreads of indices wider simply by being in the indices and because of a contagion effect...the markets should be nice and volatile tomorrow :-)

The oil thing should subside, but BZH will cause problems for credit markets in a big way - and it will probably be bad for stocks overall as this is easy to read as another consequence of the subprime mortgage issue.

[Ghost Dog]

5. Navy: nothing to substantiate Iran market rumor (Reuters)

http://today.reuters.com/news/articlenews.aspx?type=topNews&storyID=2007-03-28T015015Z_01_WBT006731_RTRUKOC_0_US-USA-NAVY-IRAN.xml
Tue Mar 27, 2007 9:50pm ET

WASHINGTON (Reuters) - The U.S. Navy on Tuesday said it had no information to substantiate a market rumor that Iran had fired at a U.S. naval vessel in the Gulf.

"Navy has nothing to substantiate that report right now," a Navy official said. "At this juncture, there is no validity to it."

"We have no information at this time that indicates any incident taking place," said White House National Security Council spokesman Gordon Johndroe.

NYMEX crude oil futures shot up more than $5 to trade above $68 a barrel on rumors about Iran, traders said.

[Imagevision]

6. Hey, Bush & Cheney , first and foremost are oilmen, what do you expect??!!

[Just-plain-Kathy]

15. Oilmen and defense tycoons....n/t

[IndianaGreen]

7. It will go a lot higher than $5 per barrel if a shooting war starts

With so many US Navy ships in the tub that is the Persian Gulf, I'll be surprised if a war does not start by accident as it did in the film The Bedford Incident.

[Imagevision]

8. George is losing his footing on this war, oil execs. know to go for the $$$ (besides)

there's always summer travel they can blame it on. it's all poppycock and the Bush administration.

[Imagevision]

9. Last year prices spiked due to hurricanes that never developed,

[youngdem]

10. Mission Accomplished?

[lovuian]

11. Business knows its coming just a matter of time

We have mad men at the helm of this Country

[ananda]

12. Mad sociopaths

I no longer ask, Would anyone be crazy enough to start another war in the ME?

[Canuckistanian]

13. Buy on rumor...

Sell on sheer, ludicrous tinfoilery.

That's your "capitalist system" for you.

It's their world, we just live (and die) in it.

[saigon68]

14. ~-

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[Javaman]

16. Nothing like coming attractions, huh? nt

[anotherdrew]

17. what news source carried these rumors? n/t