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A Tulsa TV station's mix-up caused a major mishap in the crude oil market

If anyone needed proof that it doesn't take much to make gas prices jump, here it is: Reuters reports that world oil prices leaped again today because a Tulsa, Okla., TV station published an erroneous report on its Web site.

The report claimed that a lightning strike had touched off a fire at a Tulsa-area refinery. The managers of the refinery, apparently noting that they were not on fire, promptly extinguished the false report, and the TV station removed it from their site. Not quickly enough, however, to prevent oil traders around the globe from pressing the panic button and sending crude prices spiraling up another 40 cents a barrel.

I find this story disturbing on several levels:

  1. If international markets can move on the basis of a Tulsa TV station's Web site, we are in a heap of trouble. For one thing, Web sites are almost always an afterthought at TV stations. I've worked at several, so I base this on firsthand knowledge. TV stations are in the business of broadcasting TV shows. If they have anybody who can actually write news, they're working on the 11 o'clock broadcast, not the Web page. This is generally the province of an underpaid coed or an intern. Secondly, Tulsa ranks as the No. 62 broadcast market in the United States. From a media standpoint, that's pretty much the bottom rung -- at least among towns that boast a freeway and a few multistoried buildings. If this is where oil buyers get their news, no wonder I'm paying $3.29 a gallon for unleaded.
  2. I don't think the problem is limited to the energy industry. The analysts that cover tech stocks are just as vulnerable to a bad piece of news reporting. Financial analysts are expected to be at least quasi-clairvoyant, and since that's pretty much impossible, they work hard to find out things (and when that fails, to guess things) before anybody else. Scouring the Web sites of Podunk TV stations and other spurious news outlets is one way to pick up a market-moving tidbit before it hits the major media, giving an analyst (and subsequently his or her client investors) a leg up on the competition. It's also a good place to pick up the scent of a red herring, potentially throwing markets into turmoil by indiscriminately overvaluing or trashing an unsuspecting stock.
  3. I'm happy that the fine folks at the Wynnewood Refinery in Garvin County, Okla., are safe tonight, despite what their neighbors at KOTV may have reported. I'm not so pleased that a little snafu like this can cause a global ripple effect that further drives up prices at the pump. Filling up my SUV is already a hideous experience. So please, whether you work at a TV station in Tulsa or publish a parish newsletter in Anchorage, let's all try to be at the top of our game people. The Internet is an indiscriminate medium, treating every Web page on Earth as if it were of equal importance and credibility. In this environment, one slip of the keyboard can spell disaster.

Interesting to note, a very similiar incident occured just two weeks ago when a fake email was published on Engadget, subsequently sinking the Apple stock price.

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By Trisped on 5/31/2007 1:08:40 AM , Rating: 3
Is there a link to this apple email thing?

Yeah, I never would have thought of a web page causing such a problem. Still, I bet they have a lot of gas at those refineries, so a fire would mean a large new shipment would be required.

On the side note of $3.29 a galion for gas. In souther California it is about $3.37, which is lower then it has been the last month. They also say the reason it is so high is because of the cost of refining it. Since we can't build any more refineries without the enviromentalists stepping in to stop construction, all gas is refined in the same buildings. We pay more so they can use higher level tech to increase their production. On the positive side it will make it easier to switch to an alternative fuel source...

RE: ?
By KristopherKubicki on 5/31/2007 1:35:55 AM , Rating: 2
RE: ?
By w1cked74 on 5/31/2007 8:03:13 AM , Rating: 2
$3.29 sure sounds better then the $3.49 I have been paying in my area.......

RE: ?
By novacthall on 5/31/2007 8:26:05 AM , Rating: 4
Could always be worse. You could be buying gas in Europe.

RE: ?
By Regs on 5/31/07, Rating: 0
RE: ?
By Regs on 5/31/2007 3:31:00 PM , Rating: 2
Not to mention that England compared to the USA, or any other EU nation, is about 1/10th (at the least) our size.

RE: ?
By Xerstead on 5/31/2007 3:55:03 PM , Rating: 2
But we're still paying around $2 per liter for diesel/unleaded in England. Public transport is only usefull if you live near the city centre, and even then is expensive. £2 (~$4) for a short 5-10 min bus journey. Or £4 (~$8) for a similar trip on the subway.
A train ticket to London (about 35 miles, direct, no transfers) costs over £20 (~$40).
I don't know how this compares to the rest of the US, but I found the public transport in N.Y.C. to be much cheaper.

RE: ?
By AraH on 6/3/2007 2:34:23 PM , Rating: 2
funny thing is petrol is cheaper than water in saudi arabia...

now that's bound to get my rating down...

RE: ?
By Christopher1 on 6/1/2007 8:17:33 PM , Rating: 2
That the way they get away with high gasoline prices and lots of public transportation: they are a small country compared to us.

RE: ?
By Spivonious on 5/31/2007 3:49:16 PM , Rating: 2
We can only hope that these high gas prices lead to more demand for quality public tranist.

My city has a bus system. My job is a 10 minute drive from my house. There are busses that go by my house and by my job. The problem is they're not the same bus. I'd have to ride one from my house into the city, change buses at the station and ride another one out to my job. This would take about an hour and cost me over $10. And the transit authority wonders why no one rides the bus.

RE: ?
By Xerstead on 5/31/2007 4:09:10 PM , Rating: 4

In a place like England your Job is one or two blocks away.


All the jobs are located in the industrialized and commercial sectors of major metropolitan areas...


...where mass transit is widely available.

Only once you get into the town/city centre.

God forbid if they have to use their 60 mpg rated mini-coopers.

Ever driven one? Not my favorite car either, but a lot more fun than the huge Mercedes I drive all day for work.
On a side note, I saw one that had been modified up to 200Hp. Not much compared to some, but in a car of it's size...

RE: ?
By morino on 6/1/2007 8:14:51 PM , Rating: 2
A consideration that no-one has mentioned is that the average salary is also higher than US. You have to also take into account earning power and buying power.

Everything in the U.K is vastly more expensive, so gas might not be as bad for brits.

RE: ?
By peternelson on 6/2/2007 2:13:42 AM , Rating: 2
Salaries may be higher but the major expense: mortgages for purchasing real estate property are very high in comparison because we don't have much land here. Any salary differential is wiped out by the house prices, leaving gas/petrol still a painful expenditure, alongside car insurance, parking fees etc

RE: ?
By watkinsaj on 6/2/2007 10:40:53 AM , Rating: 2
You will find that average salaries are not higher in the UK:

This table shows Purchasing Power Parity figures, so is the most accurate reflection of the average buying power in the various countries. The gap is smaller than it was, but your longer working hours keep you ahead.

RE: ?
By noxipoo on 5/31/2007 2:24:16 PM , Rating: 2
i pay $3.79 by my house in chicago, and it's the cheapest around. and no, i don't live in a mansion, its a blue collar neighborhood on the southside.

RE: ?
By apollo7 on 5/31/2007 8:22:57 AM , Rating: 2
Yeah, Gas prices have been terrible. I just moved to the Chicago area, and if you've been following gas prices then you know that Chicago has been in the thicket of it all. Driving through downtown every morning I cringe as I pass a gas station and see the range of gas from $3.97 a gallon up to even $3.99 a gallon for unleaded . I pay $3.74 just a few miles north.

RE: ?
By kleinwl on 5/31/2007 9:57:43 AM , Rating: 1
The main issue is that California requires special blends, with practically every town wanting something different. These logistical costs are passed on. Since it is a special blend, very few refineries are set up to make it and those are running close to full capacity. So any little reduction in availability send gas prices skyrocking.

RE: ?
By Ringold on 5/31/2007 6:03:30 PM , Rating: 2
It also requires down time to switch between blends, and large sums of money likely to store the gas for future use while the refinery moves on to another blend.

Regular Unleaded, Premium, Diesel, Jet-A and 100LL is all that ought to be needed as a national standard.. And 100LL could easily enough be replaced with Regular Unleaded if the FAA and aerospace industry didnt have to fear massive waves of lawsuits. Jet-A / Diesel / Kerosene could all be merged as well, and most V8s take Regular these days, leaving us with.. Regular & Diesel as reasonable short term (5-10yr?) goals. That's my speculation, anyway.

RE: ?
By Christopher1 on 6/1/2007 8:19:39 PM , Rating: 2
Really, they should make gasoline as absolutely clean as possible nowadays. There should be no reason for the 'black cloud of smoke' or ANY smoke really coming from a car nowadays.

RE: ?
By chick0n on 6/3/07, Rating: -1
RE: ?
By Finch75 on 5/31/2007 10:00:32 AM , Rating: 2
"Could be worse" - yeah, that's true...
So let's see... I'm currently paying more than € 1.40, which is USD 1.90.
Oh yes, that is the price per LITER, not per gallon.
Per gallon, it's about $7.20.

Hope that makes you feel a little better ;-)

RE: ?
By noxipoo on 5/31/2007 2:26:07 PM , Rating: 2
well, the US doesn't tax gas and cars to hell like you guys it seems. i'd actually go protest with a sign if they ever did congestion charges here.

RE: ?
By Spivonious on 5/31/2007 3:50:55 PM , Rating: 2
I heard on the news this morning that NYC is thinking about doing just that. I think it's a great idea as it would remove traffic problems from NYC and force more people to use trains and buses which would decrease the fares.

RE: ?
By Xerstead on 5/31/2007 4:28:59 PM , Rating: 2
The British government wants more motorists to use public transport and tries to get the motorist off the road with increased taxes, 'Improving' the road layout (cough...splutter...) and millions of Speed cameras.
But dispite, the introduction of road/congestion charging increased road/fuel taxes etc. No improvement or increased capacity, seems to have been made to the current P.T. system.
Also, the cost of P.T. in Britian continues to increase well above the rate of inflation.
So it's stil quicker and cheaper for me to travel by car for most journeys.

RE: ?
By StevoLincolnite on 6/1/2007 3:01:05 PM , Rating: 2
Sounds like Australia.
I'm a rural part of South Australia the price of fuel is $1.49
$1.49 per letre ROUGHLY works out to be 5.59 a gallon.
Which add the fact that for every American dollar you can buy 70 cents of aussie money...
And I think its even worst if you convert it to EU >.>

RE: ?
By exanimas on 6/1/2007 7:58:23 PM , Rating: 1
Just a correction on your money conversion, 1 USD = 1.20295 AUD according to So in USD it would be about $4.65, still much worse than the ~$3 per gallon of regular where I live.

Missed the point
By aguilpa1 on 5/31/07, Rating: 0
RE: Missed the point
By Rotkiv on 5/31/2007 11:09:31 AM , Rating: 2
Correct me if I am wrong, but I thought "spiraling" means going down?

RE: Missed the point
By nekobawt on 5/31/2007 11:45:59 AM , Rating: 2
That was my first thought, too.

RE: Missed the point
By noxipoo on 5/31/2007 2:27:15 PM , Rating: 2
not if you read the article.

RE: Missed the point
By novacthall on 5/31/2007 11:16:26 AM , Rating: 4
The price of a barrel of oil is not dictated by the industry. It's a speculative future commodity and its price is decided by investors. Investors, being a highly fickle lot, buy and sell based solely on the scenarios you describe.

If you blame anything, blame human nature. The industry has little to do with it.

RE: Missed the point
By InsaneGain on 5/31/2007 1:29:18 PM , Rating: 1
From what I hear it's the massive multi-billion $ hedge funds that greatly magnify price fluctuations and create the incredible volatility in commodity markets such as gasoline. Billions franticly flow in or out of a given commodity based on the smallest bit of information or even rumours and the price fluctuates accordingly. I work at a company that uses copper for cables, and I therefore follow copper prices. After decades of relative stability, copper prices fluctuate up to 5% daily which makes it extremely risky to enter into any kind of contract with a customer, and of course the speculators love it. How is it logical that something as fundamental as copper fluctuate 5% in one day or 54% in 3 months? The supply is relatively stable and predictable and so is global demand. I believe that the increased volatility is hurting business and consumers, and speculation should be banned in commodities and only producers and end users should be able to buy and sell commodity future contracts.

RE: Missed the point
By masher2 on 5/31/2007 2:08:43 PM , Rating: 3
Before you lobby against futures speculation, consider the situation before we evolved a futures market. One piece of bad news could and would raise the price of a commodity by 500% or more, literally overnight. In comparison, the 'volatility' of today is a pale shade.

If you ban speculation, then you reduce liquidity...and that prevents the market from working properly. Remember this. Anytime a speculator guesses wrongly and improperly winds up raising the price of a commodity, he pays for it by losing his shirt. If he's guessed right, then he's done the end consumer a favor, by signalling demand and future price changes early, thereby allowing an easier, more gradual adaption to new conditions.

RE: Missed the point
By Ringold on 5/31/2007 6:14:50 PM , Rating: 2
Additionally.. prices arent set, if I understand it correctly, until the commodity market for any given month moves on to the next month. If gas stations raise prices today based on futures contract price changes today it's not due to any direct cost being passed on yet, though it could reflect an attempt on their part to somehow manage their price such that they don't run out ahead of their next shipment or the likes.

And beyond the whole discussion, once it was known, or becomes known, that the story was false then it ceases to be incorporated in to the price of oil. Everything from global security concerns, weather forecasts and political developments impacts the price of oil and it's seems strange to me to think we can even speculate later in the same day of trading why a price move actually occured. Was it that, or did another terrorist strike occur in Nigeria? Who knows? The 'market' knows, but we sure don't.

RE: Missed the point
By Chernobyl68 on 6/4/2007 12:03:44 PM , Rating: 2
if the worldwide price of crude oil bought in the millions of barrels a day, can be affected be affected by the runor of a fire at a single refinery, that says to me that something is wrong with the market, and that investors aren't being responsible.

Gas prices are not the issue SUVs are.
By Flunk on 5/31/2007 9:49:41 AM , Rating: 2
If you don't like the amount it costs you to fill up your SUV ditch it and move to a more fuel efficient car. I've noticed that 90% of the time SUVs only have one person in them. Why do you need an enormous SUV just to shuttle one person around?

RE: Gas prices are not the issue SUVs are.
By bldckstark on 5/31/2007 1:19:12 PM , Rating: 2
In Indiana they have a law that requires all kids under the age of 8 to be in a car seat. All child seats I have ever seen exceed 20" in width. A car seat is less than 60" in width at the hip. If you have three kids or more, you must have a vehicle that has three rows of seats in order to have them all in car seats. I haven't seen a vehicle that gets better than 24mpg city that has three rows of seats.

I drive a Neon, my wife drives a Suburban. She drops the kids at daycare, then drives all by herself to work. That means that 50% of the time she is she is the only person in the vehicle. I use about 2 gallons of gas per day to get to and from work in my Neon and she uses about 0.66 gallon. If we traded for a Honda minivan, one of the most efficient people movers with it's cylinder de-activation technology, she would use about 0.6 gallons. That adds up to a whole 0.06 gallon difference.

Large vehicles have always been required to move families around. Look at the conversion vans of lore, or the station wagon. All the way back to the connestoga wagon. They required more horses to pull. Vehicle makers need to keep making engines more efficient, but large vehicles will always require more fuel to drive. The SUV argument will always exist in some form or another.

Minivans are not much better at sipping gas, why don't we bash those for a while? I haven't seen any hybrid minivans on the new car lots either.

Simple physics - lots of cargo, lots of fuel.

By gradoman on 5/31/2007 2:08:01 PM , Rating: 2
And there are 365 days in a year. So, do the math on that one before saying it doesn't add up or it is not worth it.

Sometimes, a little turns into a lot.

By Spivonious on 5/31/2007 3:55:41 PM , Rating: 2
Perhaps you should be driving less than 60 miles per day to work.

And continuing the first reply to your post, .06 gallons adds up to almost 22 gallons for a year. That's like two extra fill ups for your Neon.

RE: Gas prices are not the issue SUVs are.
By othercents on 5/31/2007 4:33:53 PM , Rating: 2
There are multiple problems and SUVs are just a part of it. Granted every person can come up with a reason why they need their SUV or what other vehicle they drive, and on the flip side someone can come up with the reason why certain people don't. SUVs are useful even for a single male especially when you have large dogs and carry equipment all the time. What is real interesting is while people bash SUVs, Trucks are just as bad and usually rarely used for their intended purpose. I do have friends that own a commuter vehicle and a truck, so that they can save on gas.

I think the main two problems with gas prices is engine size/performance and speeds. There are many people in the US that want higher performance cars that have engines that suck more gas. If we backed down the performance to more "normal" levels then you would also decrease fuel consumption. Plus people have to learn to spend less gas when they leave a stop sign.

Most people who drive during non rush hour times are driving 10+mph over the speed limit especially on the freeway. Usually in Denver it is 80mph in a 55mph zone. You can increase you MPG by 2 to 5 gallons if you slowed down. I know that when I take a long trip I get 35mpg at 65mph, but only 27mpg at 80mph in my Nissan Altima. Yes it is a V6 and I love my performance, but if I really cared about the price of gas I would do everything to make my MPG as high as possible.


By Ringold on 5/31/2007 6:19:39 PM , Rating: 2
The points been made in the media enough that driving fast burns more gas, so it's a safe assumption that when people drive fast they're aware they're going to have to pay more next time they pull in to the pump.

People want what they drive, and people drive the way they want, they pay the price for their vehicles and for their gas, and they're aware of it all. I see no reason for anybody to preach to them about it.

People that're concerned about their gas bills (which are fairly close to historic lows in terms of % of disposable income), then they'll drive as you described. Otherwise, they'll pay more. Not the government, not taxpayers, but they will pay their gas bill. None of our business.

Record Profits.
By Mitch101 on 5/31/2007 1:36:18 PM , Rating: 2
I think the problem is the Oil Companies got a good taste of record profits without any repricussions of this. They learned they can basically do what they want and every spring the prices go up. They can claim production cant keep up with demand of the spring traveller however record profits usually mean they are making above and beyond their share.

Gas needs competition. Hybrids are not really competition it just extends the monopoly of the gas companies for many more years. If everyone drove a hybrid they would find a new way to charge twice as much for gas.

We need alternatives to gas to cause competition which causes price wars.

RE: Record Profits.
By gramboh on 5/31/2007 2:14:07 PM , Rating: 2
Ahh I see, so all the tens of thousands of oil and gas exploration & production companies, midstream transporters, refiners and downstream sellers of end products (gasoline) are in collusion across the world to fix the price of oil? Oh also OPEC and institutions participating in the futures market.

RE: Record Profits.
By Ringold on 5/31/2007 6:22:12 PM , Rating: 2
OPEC amuses me greatly. They set their production targets and it's almost a race to see who can cheat the fastest..

RE: Record Profits.
By eftl on 5/31/2007 4:02:17 PM , Rating: 3
The solution to our energy needs have been well known for about 60 years now. It's called nuclear power. Zero civilian deaths (in North America), Zero fuel supply in politically unstable regions, Zero emissions, and a proven plan to store waste. And it's cheap. No wonder it is so unpopular in the US.

Refineries Coming Back Online
By techfuzz on 5/31/2007 9:05:25 AM , Rating: 2
I heard on Marketplace (NPR) earlier this week that 5 major refineries that had been running well below capacity or not at all since Katrina and Rita were all brought back online this week running at near full capacity. I guess that news didn't get posted on that Tulsa TV news website for the oil commodities investors to read.

RE: Refineries Coming Back Online
By hoosier on 5/31/2007 3:06:18 PM , Rating: 1
The whole refining capacity issue has been orchestrated by the oil companies. In the last 30 years they have closed 174 refineries. Many in the mid 90's when they had too much capacity. Our refining capacity is now lower than it was in 1980 and we all know demand is much higher. This is not an accident.
This report from 2001 from a government investigation is 6 years old but predicts the situation were in now.

Many of these refineries that closed down had other companies were willing to buy them and offered millions and the big companies refused to sell them. They rather tear them down at great expense as they had the forsight to know if they reduced refining capacity enough it would drive the market artificially high at some point.

Do not believe 1 word of propaganda you read that says enviromental groups have been blocking the building of new refineries. Exactly 1 application for a new refinery has been submitted in the last 20 years.

The oil companies have been tactically lowering refining capacity for a very long time.

This is a big shell game and we are just pawns and our leaders have no interest in solutions as the largest campaign contributors are in this industry. This is on both sides of the aisle.

RE: Refineries Coming Back Online
By Ringold on 5/31/2007 6:35:54 PM , Rating: 3
There's been no applications for refineries to build on Europa in the last 20 years. Does that mean anything?

These applications require millions to be spent ahead of time on environmental impact studies and the like, and if companies know that local NIMBY activists and environmental regulation will make it near impossible or exorbitantly expensive to construct then there's no reason to go to the expense of applying. That's rather basic logic.

And where were the eeeevil colluding oil capitalists in the 90s when they were running deep in the red in a failing industry due to oil well below $20/barrel? You are right about one thing -- unsustainably low prices in the 90s lead to capacity cuts (partly to avoid bankruptcy, partly to foster an environment where they can survive in the future), and now we reap what we sow. It's called a business cycle . It's natural, it's currently at a peak, and after some years, after all these companies pour their billions in to ever-more-expensive exploration projects, prices will go back down, as will the energy complexes profits.

The rest of what you said, like refusing free money for closed facilities, is paranoia, and not worth responding to. And yes, the government may have had the foresight to see this in 2001, but guess what? Draw a long line, mark "1900" at one end and "2200" at the other end, and draw something that resembles a sine wave from one end to the other, and whoola! Indentical vaguely-accurate predictions without the expense of a small army of PhD economists.

By DigitalFreak on 6/4/2007 1:53:37 PM , Rating: 2
You have been targeted for termination

By radzer0 on 5/31/2007 10:38:57 AM , Rating: 2
Whos gonna make a b ig false report that makes prices go down?

RE: Sooooo
By techfuzz on 5/31/2007 2:24:28 PM , Rating: 4

US refineries to release 999 trillion gallons of stockpiled gasoline. Oil companies also find "gazillion" gallon oil field 5 feet under ground in Oklahoma (near Tulsa). Wells already in place and pumping away.

In other news, scientists have found that cold fusion can be done in your bathroom by using a turkey baster, toilet paper roll, and chewing gum wrapper while watching MacGuyver re-runs.

And in sports news...

RE: Sooooo
By Gneisenau on 6/1/2007 2:58:44 PM , Rating: 2
Dammit, I was just about to patent that cold fusion process....Someone beat me to it..

By gramboh on 5/31/2007 2:35:44 AM , Rating: 4
$0.40US price movement / ~$65US rough crude price = 0.62% change in price. I wouldn't call that a spiraling price change. If crude changes less than $1 in a day it's not considered a major change. Yes, the theme is annoying, but one decently large player could move the price that much with probably $100M of futures activity or less. A drop in the bucket.

RE: Hmm?
By Ringold on 5/31/2007 6:24:11 PM , Rating: 3
But "False news report causes nearly indistinguishable change in oil futures markets" wouldn't be a very sensationalist headline!

I think you underestimate Tulsa
By soydios on 5/31/2007 4:08:39 AM , Rating: 6
Perhaps you're underestimating Tulsa, Oklahoma. They used to be the center of oil and gas production in this country, and the Wall Street Journal of oil publications, the Oil & Gas Journal ( ) is published there. Just an FYI.

they read about it on the internet...
By kattanna on 6/1/2007 3:06:21 PM , Rating: 2
so who seriously takes a single report found on the internet as gospel?

i wouldnt be too surprised if this person who first ran with the story is also still awaiting MS to send him that check for forwarding those emails...

RE: they read about it on the internet...
By Christopher1 on 6/1/2007 8:20:16 PM , Rating: 2
Who takes a single report seriously? Quite a few people, actually.

This could be usefull
By CollegeTechGuy on 6/1/2007 3:48:23 PM , Rating: 2
However funny and aggravating this whole story is. Lets use it to our advantage. Lets have the media post a report about how some other podunk refinery figured out how to double the ammount of gasoline refined from a single barrel of crude oil. Then maybe prices will go down....

"Nowadays you can buy a CPU cheaper than the CPU fan." -- Unnamed AMD executive
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