Broker Sent Oil Prices to Eight Month High in a Drunken Stupor

On June the 30th 2009 oil mysteriously jumped by more than $1.50 a barrel during the night, to reach its highest price in eight months, the kind of swing that is caused by a major geopolitical event.

The amazing, true cause of this price spike has now been released by a Financial Services Authority investigation (FSA).

Although not authorised to invest company cash in trades Steve Perkins, a long standing, senior broker at PVM Oil Futures, had managed to spend $520 million on oil futures contracts throughout the night.

On the morning of the 30th an admin clerk called Mr Perkins to ask why he had bought 7 million barrels of crude during the night. Mr Perkins had no recollection of the transactions, and it turned out that he had made the trades during a “drunken blackout.”

By the time PVM had realised the transactions had not been authorised by a client, they had incurred losses of $9,763,252.

Between the hours of 1.22am and 3.41am, Mr Perkins gradually bought 69 percent of the global market, whilst driving prices up from $71.40 to $73.05, by bidding higher each time.

At 6.30am, presumably sobering up and realising what he’d done, he sent a message to his managing director claiming an unwell relative meant he would not be able to make it into work.

Following an official investigation Mr Perkins admitted to having a drink problem, had his trading license revoked for five years, and was given a fine of £72,000.

The FSA have said that they will re-approve his license after the five year period, if he has recovered from his drink problem, although they warned that “Mr Perkins poses an extreme risk to the market when drunk.”

Source: http://oilprice.com/Latest-Energy-News/World-News/Broker-Sent-Oil-Prices-to-Eight-Month-High-in-a-Drunken-Stupor.html

By. James Burgess of Oilprice.com

US Navy Develops a Technique to Produce Jet Fuel from Sea Water

The Naval Research Laboratory (NRL) in Washington is working to develop a system that can produce jet fuel from seawater.

Last year the US Naval Military Sea Lift Command, the main fuel supplier to Naval vessels that are at sea, delivered around 600 million gallons to ships that were on the open water.

Refuelling is a very difficult and dangerous procedure when two vessels are at sea, especially if the seas are rough, or there is a storm, or even in the middle of a fire fight. Yet it is also vital as running out of fuel would be devastating to a naval ship in action.

The NRL has designed a system which harvests carbon dioxide and hydrogen, the raw ingredients of jet fuel, from the seawater. NRL discovered that gathering carbon dioxide from the seawater was far more efficient than getting it from the air because the concentration in seawater is 140 times greater. The hydrogen and carbon dioxide go through several processes to create olefins (a hydrocarbon), and then two more steps to turn the olefins into suitable jet fuel.

So far the lab tests have indicated that the process will produce jet fuel at a cost of around $3 – $6 per gallon. Now all that is needed is large scale tests on the open sea.

Source: http://oilprice.com/Latest-Energy-News/World-News/US-Navy-Develops-a-Technique-to-Produce-Jet-Fuel-from-Sea-Water.html

By. Joao Peixe of Oilprice.com