TELECOM Digest OnLine - Sorted: Re: Web Site Error Rocks Global Oil Markets

Re: Web Site Error Rocks Global Oil Markets

Robert Bonomi (bonomi@host122.r-bonomi.com)
Sat, 02 Jun 2007 00:46:23 -0000

In article <telecom26.154.5@telecom-digest.org>,
John Mayson <john@mayson.us> wrote:

> On Thu, 31 May 2007, Reuters News Wire wrote:

>> World oil prices jumped briefly on Wednesday after a television station
>> in Tulsa, Oklahoma -- the No. 62 U.S. media market -- posted an
>> erroneous story about a refinery fire on its Web site.

> Someone explain something to me.

> Why would the price of a raw material go up due to a refinery fire?
> It'd be like the price of wheat rising on news of a fire at a Wonder
> Bread factory. I could see the price of gasoline rising, but not oil.

Because the amount of oil being 'sold' on the market is _many_times_
higher than the actual volumes delivered.

Many operations buy and sell oil 'futures' to protect themselves
against changes in the price of various kinds of refined products --
especially when they do not have the ability to buy/sell futures on
the particular product they require.

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