- Aug 8, 2012
Rising fuel prices got you down? Blame Twitter
The power of social media revealed itself yesterday in the form of fluctuation in fuel prices based on a false tweet.
According to The Wall Street Journal, a Twitter account claiming to be Russian Interior Minister Vladamir Kolokoltsv tweeted that Syrian president Bashar al-Assad had been injured or killed. That tweet which occurred at 9:59 AM EST, was followed by two more tweets alleging the confirmation of al-Assad's death.
In the hour following that tweet, light, sweet crude prices rose from $90.82 to $91.99, and the jump took place in between 10:15 and 10:45. According to the Reuters report, the Russian ministry denies firing off the tweets and denies any connection to the account.
Price Futures Group analyst Phil Flynn pointed out "a well-placed story can move the market, and that looks like what happened." Though Syria itself is not a major oil producer, it is feared that Iran would react to the news because of their connection to and support of Assad
In the wake of sanctions imposed due to their continued participation in a nuclear weapons program, Iran has threatened to close off the Straight of Hormuz, a major throughway for ships carrying crude oil to the rest of the world.
Because of the hypersensitivity of the international tensions in the Middle East, and those trading in oils who follow the area closely, the rumor of Assad's demised spread like wildfire. The combination of Mideast unrest, and the spread of information through texts and tweets means it's unlikely this is the last time something like this will happen.