Trump's Venezuela Deal: A Recipe for Market Manipulation
President Donald Trump's announcement about the 'biggest oil deal in history' has raised eyebrows, particularly when it comes to timing. The agreement, which grants the US majority control over more than 65 billion barrels of Venezuela's proven oil reserves, was made after the West Texas Intermediate crude oil futures market had closed for the week.
This means that market participants who knew about the announcement beforehand could have potentially profited from falling crude prices. The person with advance knowledge could establish a position to benefit from lower oil prices before the market reopened on Sunday evening, giving them an obvious advantage over others.
The situation highlights how the timing of government announcements can be manipulated for financial gain. A statement does not necessarily need to change today's physical supply to move today's price. Financial markets trade expectations, and a headline can move crude prices before any additional barrels are produced.