Commodities : Wednesday, July 22, 1987 : Rumors Jar Oil Market

Oil and financial futures markets were jarred Wednesday by rumors that one one of the reflagged vessels entering the Persian Gulf had been attacked. The nervous markets recovered after the rumors dissipated.

On other markets, wheat futures were higher and most livestock and meat advanced.

“The oil market basically spent most of the day dispelling various rumors about activity in the Persian Gulf,” said Andrew Lebow, an analyst in New York with Shearson Lehman Bros.

Prices on the New York Mercantile Exchange opened lower on some follow-through selling from Tuesday as traders began to feel that the Persian Gulf situation wasn’t as explosive as previously believed. But then rumors surfaced that a ship had been attacked and prices rallied strongly.

“In the afternoon, almost hourly a different rumor about the ships was being denied,” said Lebow.

The market was sufficiently nervous to close near the highs of day despite reports that the ships had navigated safely into the Persian Gulf.