Print 59 comment(s) - last by DigitalFreak.. on Jun 4 at 1:53 PM

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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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

"Well, we didn't have anyone in line that got shot waiting for our system." -- Nintendo of America Vice President Perrin Kaplan
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