Washington, United States. An unusual surge in oil futures trading minutes before President Donald Trump announced talks with Iran has raised questions from market experts about possible insider dealing. Trump’s post on Truth Social shortly after 7am EST on Monday sent oil prices sharply lower and pushed the Dow Jones Industrial Average up by more than 1,000 points.
Market-moving post and shift in tone
Trump described the talks with Iran as “productive”, easing investor fears over rising oil prices and their effect on inflation and growth. The move marked a sharp shift from his post on Saturday, when he threatened to “obliterate” Iran’s power plants unless Tehran reopened the Strait of Hormuz to shipping.
Spike in oil futures trading
The abrupt change drew attention to unusual trading activity shortly before Monday’s announcement. Bloomberg News and the Financial Times reported a spike in oil futures trading in the minutes before Trump’s Monday morning post.
Between 6:49am and 6:50am, about 6,200 Brent and West Texas Intermediate futures contracts changed hands, with a notional value of $580 million, according to the Financial Times’ analysis of Bloomberg data. Bloomberg reported that average trading for the same one-minute period over the previous five trading days was about 700 contracts.
Experts cite unusual volume and legal context
Market experts said the volume in crude oil futures early on Monday was higher than usual for that time of day.
“The massive spike in volume of trades right before that post is certainly enough to raise eyebrows, and I think to launch an investigation into what was behind that,” Stephen Piepgrass, a lawyer specialising in futures trading at Troutman Pepper Locke, told CBS News.
Insider dealing, when individuals or firms trade on material non-public information, is illegal because it undermines market integrity and investor confidence, CBS News business analyst Jill Schlesinger said. “Does it seem fair that someone is trading and making money and profiting on information that you and I don’t have? Yeah, that kind of stinks,” she said.
What do you think regulators should do when trading surges immediately before a market-moving announcement?