Very rarely are journalists afforded the power to move markets, but on Friday morning a reporter's tweet sent the market into a frenzy, with the Dow Jones index leaping almost 200 points - or more than 1 per cent - within minutes.
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Translating comments by the United Arab Emirates energy minister, spoken to Sky News Arabia, Wall Street Journal's Middle East correspondent Summer Said tweeted:
OPEC is ready to cooperate on a cut, but current prices are already forcing non-opec producers to at least cap output, says UAE Energy min— Summer Said (@summer_said) February 11, 2016
Within five minutes of Said's tweet going live, oil began gaining value at an astonishing pace. Oil in New York jumped $US1 off record lows. Futures for the Australian stock market also darted higher, showing just how susceptible investors are to the news cycle.
The oil price kept rising throughout the afternoon on Friday, trading almost 6 per cent higher mid-afternoon. However analysts are wary of reading too much into the Minister's comments, given speculation over recent weeks that OPEC and Russia were looking to make a deal came to nothing.
"We view this as further jawboning, with the likelihood of a coordinated response on supply cuts very low," said ANZ in a note to clients.
The comments come at a time when the capping of oil production would be welcome news for oil producers, confronting cripplingly low prices - at their lowest in 12 years. Market watchers have been stunned by the languishing price, pointing out the barrels housing the oil cost more than the commodity itself.
It wasn't only markets ecstatic at the news. True to form, Twitter exploded as well, questioning the legitimacy of the comments and whether they were correctly interpreted.
— Sreflah (@SreflahP) February 11, 2016
@summer_said seems like very irresponsible reporting. UAE does not speak for all of OPEC.— Jeff Lewis (@ChicagoPhotoSho) February 11, 2016
@summer_said my God this moved the market in a BIG WAY— 10X ETF & LIQUID CDS (@DallasTexxxas) February 11, 2016
@summer_said News to me...You confirm this with the Saudi's or are you just quoting the UAE energy minister who doesn't like cheap oil?— Cyrus Sanati (@BeyondBlunt) February 11, 2016
Until now, OPEC, a cartel of oil producers headed by Saudi Arabia, has been unwilling to curb production in an effort to stabilise markets. Some members, namely Venezuela, Ecuador, Algeria and Iran, have been lobbying for some kind of market intervention, given their production is becoming more expensive as oil bumbles around $30 a barrel. However, until now Saudi Arabia and the United Arab Emirates have stubbornly refused to curb their massive oil output, hoping to squeeze smaller players out of the market.
The United Arab Emirates energy minister's comments reported today, while he doesn't speak for the entirety of OPEC, indicate a change in thinking.
The violent social media reaction and a wildly swinging market are reminiscent of a rogue tweet from the Financial Times twitter account in December, where the newspaper leaked the European Central Bank's interest rate decision early. Sharemarkets were devastated and the euro shot higher. The tweet was deleted within minutes, but not before billions of euros worth of trades had transpired.
