A drunk trader cost PVM Oil $10M — and moved the global oil price

Stephen Perkins was a Brent crude oil broker at PVM Oil Futures in London, where he had worked since 1998. He traded futures contracts for clients, and was not authorized to trade using PVM's own money. Over the weekend of June 27-28, 2009, Perkins attended a company-sponsored golf event where he drank heavily. He returned to London and continued drinking from midday on June 29.

At 1:22 a.m. on June 30, while in an alcohol-induced blackout, Perkins began trading. Over the next two and a half hours, he bought 7 million barrels of oil worth approximately $520 million. At times, his trades represented 69% of all Brent crude oil being traded globally — ten times the average trade volume. The buying spree drove Brent crude from $71.40 to $73.50 per barrel, the highest in eight months, an increase normally associated with major geopolitical events.

At 6:30 a.m., Perkins texted his boss saying he felt ill. By 7:45 a.m., an administrative clerk contacted him about the early-morning trades. Perkins claimed he had been helping a client, but by 10:00 a.m. his story was disproved. PVM scrambled to offload the futures, ultimately losing $9.76 million — nearly the entire company's annual income of $12 million.

The Financial Services Authority investigated and found Perkins 'not fit and proper.' He was barred from trading for five years, fined £72,000, and required to attend alcohol rehabilitation. The FSA noted: 'Mr. Perkins poses an extreme risk to the market when drunk.' The case became the definitive example of how a single intoxicated person can move a global commodity market.