Exclusive | Heres who and what to blame for oil skyrocketing to $120 a barrel and causing widespread panic

Oil went on an unprecedented roller coaster ride at the start of the week, with the price surging more than 30% to near $120 a barrel late Sunday – only to erase all of those gains just hours later. Sure, a war is happening in the Middle East – but that wasn’t the only reason, On The Money has learned.Despite all the yipping in the mainstream media about an allegedly intractable quagmire faced by President Trump, the oil-price shock was made demonstrably worse by a bunch of high-profile hedge funds.Trading sources tell On The Money each had the same trades in the oil futures markets.They also used similar AI-inspired algorithms to set risk parameters designed to prevent significant trading losses. But when on Sunday, the initial headlines began to cross about a possible prolonged war, their algos kicked in all at once, sending oil prices through the roof as the funds attempted not to get stuck in a bad trade that resulted from the soaring price of crude.

Each was said to have lost some big bucks.According to one Wall Street trader who was in the middle of the tumult: “This was pretty crazy and once the price of oil broke through their risk parameters, it was game on.”Maybe the best indication that the steep rise in oil over the weekend was largely algo-driven was that the war isn’t going as bad as the price of oil those days would indicate.In fact, every Wall Street analyst I know briefed on the real situation on the ground is hearing that Iran’s military is on its last legs.

It can still do damage, but less with each passing day. That means tankers should soon be able to gain renewed access to the Strait of Hormuz.In the meantime, there’s lots of ways to make up for the decline in the Gulf supply: Oil from Venezuela, domestic production and releasing barrels from the strategic petroleum reserve, which is exactly what’s happening as I write this.Also worth noting, particularly as we move forward with gauging crude as a proxy for the mission ...