Following the announcement, WTI spiked 2.5% by mid-day, up almost $2.00 / bbl; and trading at $78.70.
I don't think oil prices actually soared, but the announcement reversed the falling price of WTI that had been occurring for the past several days prior to the announcement.
But worse than that, share prices of US oil companies across the board did rise significantly on a day when the rest of the market was generally down. This is all counterintuitive, but makes sense and some talking heads predicted as much.
Holy mackerel! EOG is up almost 6%.
The big question: why did shares in oil companies jump after the announcement?
One likely explanation: day in and day out, "we" are told that computers / algorithms / AI run the stock market, not individual traders. The algorithms are tweaked day in, day out based on a gazillion data points. It is very possible the algorithms have now become more complex -- due to machine learning -- than software engineers actually writing code.
Somewhere in that very, very complicated algorithm is a "component" that factors in the US president abruptly releasing more than ten percent of the oil stored in the SPR. Regardless of the complexity of the algorithm, all things being equal, the machine could only "explain" this one way: there's a dire shortage of crude oil.
And the algorithms acted accordingly.
It's only when trading gets out of hand, that human (?) regulators move in to stop trading, to allow time for non-algorithmic trading to "balance the market."
But this surge in price today did not start with Mr John Doe buying a few shares of XOM assuming the price would go up today. No, this all started with options trading, and algorithms already in place.
And, oh by the way, this is Tuessday, the 23rd of November: this is not the last trading day of the month; it's not triple witching hour. In other words, this is not being artificially driven. This started with algorithms written decades ago and tweaked ever since, and, of course, options trading.
It's also possible, the Robinhood / Reddit crowd had something to do with this.
But, the big question: who most would like to see Brandon fail with this hare-brained idea?
A corollary to that question: who has the money to start the ball rolling?
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