Oil traders jolted by tweet recalling Yom Kippur war

Post from Israeli military about attack 40 years ago spurred spike in oil prices

The posting referred to an attack 40 years ago in the Yom Kippur war, the latest in a series of tweets from the Israel defense forces Twitter handle (@IDFSpokesperson) commemorating the war.

The posting referred to an attack 40 years ago in the Yom Kippur war, the latest in a series of tweets from the Israel defense forces Twitter handle (@IDFSpokesperson) commemorating the war.

Fri, Oct 11, 2013, 08:43

Oil traders razor-focused on signs of escalating violence in the Middle East were jolted yesterday by a Twitter posting from the Israeli military that, at first glance, suggested they had just bombed Syrian airports.

Oil prices jumped $1 as the talk raced through oil markets, which frequently react quickly to rumors of geopolitical events and where traders have increasingly turned to the internet and social media for advance warning of escalating risks, from the Arab Spring to the Iranian nuclear standoff.

The tweet was true, but it wasn’t news. The posting referred to an attack 40 years ago in the Yom Kippur war, the latest in a series of tweets from the Israel defense forces Twitter handle (@IDFSpokesperson) commemorating the war.

The tweet just before 10.30 am EDT stated: “Oct. 10 #YomKippur73: Israel Air Force bombards airports in Syria to prevent Soviet weapons reaching the Syrian Army”. It then links to a website that gives a day-by-day account of the war.

“Obviously this was part of our Yom Kippur Twitter series. The facts are there and simple to read. It was apparent within the tweet itself,” said IDF spokesman Peter Lerner.

Although traders quickly realized the historical nature of the tweet, oil prices maintained their gains, supported in large part by hopes of a breakthrough in US debt discussions and earlier anxiety over political stability in Libya.

Front-month Brent crude prices rallied from $110.40 a barrel at 10.20 am EDT -- just before the tweet -- to as high as $111.50 just after 11 am, as trading volumes rose. By 1 pm oil was up $2.68 a barrel to $111.74, its highest in a month.

The incident is the latest example of how social media outlets are playing an increasingly important role in financial markets, often causing sudden moves - not always corrected.

In April, hackers took control of the Associated Press Twitter account and falsely posted that two explosions at the White House injured president Barack Obama. Reuters data showed the tweet briefly wiped out $136.5 billion (€100 billion) of the S&P 500 index’s value before markets recovered.

“The IDF tweet caused a bit of a stir in the oil market, with rumours circulating of a possible Israeli strike in Syria before people realised they were referring to events 40 years ago,” said Richard Mallinson, chief policy analyst at consultancy Energy Aspects.

Oil prices surged in October 1973 after a coalition of Arab states launched a surprise attack on Israel during the Jewish holy day of Yom Kippur, threatening to overwhelm the country. Israel launched a massive counter-offensive before a ceasefire took hold.

The war prompted Arab nations and members of OPEC to use what they called “the oil weapon,” proclaiming an oil embargo that lasted several months and set off global oil price shocks.

More recently, the conflict in Syria, and its potential to spill over into large oil-producing nations in the region, have kept crude traders on closely watching for fresh news.

Reuters

Sign In

Forgot Password?

Sign Up

The name that will appear beside your comments.

Have an account? Sign In

Forgot Password?

Please enter your email address so we can send you a link to reset your password.

Sign In or Sign Up

Thank you

You should receive instructions for resetting your password. When you have reset your password, you can Sign In.

Hello, .

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

Thank you for registering. Please check your email to verify your account.

We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.