LONDON
Oil traders bet millions of dollars before US President Donald Trump's post pledging to postpone strikes against Iranian energy infrastructure, according to a report on Tuesday.
The volume of trade increased 15 minutes before a social media post by Trump announcing the decision, according to market data reviewed by the BBC.
Data indicated that the price of oil fell sharply after the announcement, dropping 14% in a matter of minutes, meaning traders who bet on the unexpected move would have made money.
The report, citing market analysts, said the unusual activity opens up the possibility that the bets may have been placed with prior knowledge of the move.
A spokesman for the White House told The Financial Times that it would not "tolerate any administration official illegally profiteering off of insider knowledge."
Global financial markets have been hit by the escalation in tensions in the Middle East, as Trump last Saturday threatened to "obliterate" Iran's power plants if it did not reopen the Strait of Hormuz, through which about 20% of the world's oil and gas normally pass, within 48 hours.
Markets were closed Saturday, but fell sharply across Asia when they reopened Monday.
But early Monday, before markets in the US opened, Trump wrote on his Truth Social platform that the US held "VERY GOOD AND PRODUCTIVE CONVERSATIONS" with Tehran about a "COMPLETE AND TOTAL RESOLUTION" to hostilities.
Stocks immediately bounced and the price of oil dipped to as low as $84 per barrel for the benchmark US price.
Appears ‘abnormal, for sure’
Data showed that at 6.49 ET in the US (1049GMT), 15 minutes before the US president's post, traders placed 734 bets on West Texas Intermediate (WTI) crude oil contracts on the New York Mercantile Exchange (Nymex).
A minute later, that number jumped to 2,168. That is equivalent to about $170 million.
Data for previous Mondays revealed that far fewer trades are normally made at that time of day.
"This appears abnormal, for sure," said Mukesh Sahdev, chief oil analyst at XAnalysts.
"At that time, there were no indications that any serious talks had been taking place between the US and Iran. So to place so much money on oil going down raises questions," said Sahdev.
"Just before he posted on social media, quite a lot of people took out contracts that would allow them to profit from the oil price falling," according to Rachel Winter, a partner at the wealth management firm Killik & Co.