On June the 30th 2009 oil mysteriously jumped by more than $1.50 a barrel during the night, to reach its highest price in eight months, the kind of swing that is caused by a major geopolitical event.
The amazing, true cause of this price spike has now been released by a Financial Services Authority investigation (FSA).
Although not authorised to invest company cash in trades Steve Perkins, a long standing, senior broker at PVM Oil Futures, had managed to spend $520 million on oil futures contracts throughout the night.
On the morning of the 30th an admin clerk called Mr Perkins to ask why he had bought 7 million barrels of crude during the night. Mr Perkins had no recollection of the transactions, and it turned out that he had made the trades during a drunken blackout.
By the time PVM had realised the transactions had not been authorised by a client, they had incurred losses of $9,763,252.
Between the hours of 1.22am and 3.41am, Mr Perkins gradually bought 69 percent of the global market, whilst driving prices up from $71.40 to $73.05, by bidding higher each time.
At 6.30am, presumably sobering up and realising what hed done, he sent a message to his managing director claiming an unwell relative meant he would not be able to make it into work.
Following an official investigation Mr Perkins admitted to having a drink problem, had his trading license revoked for five years, and was given a fine of £72,000.
The FSA have said that they will re-approve his license after the five year period, if he has recovered from his drink problem, although they warned that Mr Perkins poses an extreme risk to the market when drunk.
By. James Burgess of Oilprice.com
Be Part of Quality Journalism
Quality journalism takes a lot of time, money and hard work to produce and despite all the hardships we still do it. Our reporters and editors are working overtime in Kashmir and beyond to cover what you care about, break big stories, and expose injustices that can change lives. Today more people are reading Kashmir Observer than ever, but only a handful are paying while advertising revenues are falling fast.