The first day of September was one strange morning in the oil and gasoline futures market. Prices of both commodities fell dramatically, and gasoline prices were in collapse from the previous day’s prices; when you post pricing every day, you really notice it when prices move big. But something really odd happened that morning: I posted the prices around 5:30 a.m., and 30 minutes later half the previous day’s price declines were nearly wiped out.
In that short period the market was rapidly recovering — only to fall back during the course of that day. But prices don’t do that in the middle of the night based on real-world supply and demand equations. So, on the news that afternoon on KLIF AM, I said that the price fall, reversal and fall again was the result of speculators trying to cover their “shorts” in the market. Bloomberg came to the same conclusion three days later.