A lone trader out to win a little fame made the purchase that took oil prices to the historic level of $100 dollars a barrel this week but he lost $600 on the deal, analysts said.
The trader has been named by United States and British media as Richard Arens, who runs a one-man oil brokerage, ABS.
”The magic figure was hit apparently on the back of a single trade, rumoured to be a local intent on fame,” Sucden analysts wrote in a commentary on Thursday on the record-breaking deal.
Arens offered $100 000 on the New York market on Wednesday for 1 000 barrels of oil, producing the much talked of $100 per barrel, which sparked anguish across the financial markets.
He later sold on the contract for slightly below $100, taking a $600 loss.
”It was just for the form; he wanted to be the first in the world to buy oil at $100,” said Antoine Heff, an analyst at NewEdge.
The new price record came as a shock to the markets, although many had been saying $100 dollars was at some point given strong demand and supply constraints.
Oil slipped back slightly but hit $100 again on Thursday.
On Friday, profit-taking pushed the price back again, with quotes in late Asian trade of $99,23 for New York’s main contract, light sweet crude for delivery in February.
The initial spike to $100 resulted from ”really just one trade, which was like a stunt”, but more trades pushed it above $100 dollars again on Thursday, said Victor Shum, of international energy consultancy Purvin and Gertz in Singapore.
”We have eased off from the $100 level primarily because of some profit-taking,” Shum said.
Analysts say rising oil demand has outstripped growth in supply.
They point to booming Asian economies like China and India and insufficient investment by oil exporters, which has led to a decline in spare production capacity.
Geopolitical tensions and new buying interest from speculative investors like investment funds are also behind the quadrupling in the oil price over the last five years, analysts say.
A weakening US dollar, which makes oil more affordable for buyers in stronger currencies, is another factor cited for the rise in prices. — Sapa-AFP