Twitter rumor leads to sharp increase in the price of oil

On social networking site Twitter, information can spread almost instantly — news of Whitney Houston's death hit Twitter mere moments after it happened (and nearly an hour before reported by the media). But there's a downside to that speed. When a rumor about the president of Syria's death hit Twitter, it was circulated faster than it was debunked, leading to a sharp, quick increase in the price of oil on the commodity markets.

The rumor was started at 9:59 a.m. Eastern on Monday by a Twitter account that claimed to be of a Russian government official. That news, as well as the two follow-up tweets that supposedly confirmed the death, spread like wildfire over Twitter. In the 10 o'clock hour, the price of a barrel of crude oil jumped from $90.82 to $91.99. The price came down again as news that the rumor was false began to spread across market trading floors.

Commodities markets are frequently impacted by rumors, though this is one of the first times that social media has affected the price of crude so directly. "A well-placed story can move the market, and that looks like what happened," explained Phil Flynn, an analyst with Price Futures Group, to The Wall Street Journal.

[Image credit: Silhouette of working oil pumps via Shutterstock]
[via @lheron]

This article was written by Fox Van Allen and originally appeared on Tecca

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