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Old 07-24-2008, 08:13 AM   #1 (permalink)
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Thumbs up Oil Market Manipulation Proven
CFTC charges Optiver with oil-market manipulation: Financial News - Yahoo! Finance

Reuters
CFTC charges Optiver with oil-market manipulation
Thursday July 24, 11:41 am ET

WASHINGTON (Reuters) - The U.S. Commodity Futures Trading Commission on Thursday charged global trading fund Optiver Holding BV with manipulating the NYMEX oil market in March 2007. The complaint charged that three employees made about $1 million through manipulation of crude oil, gasoline and heating oil futures on the New York Mercantile Exchange.

According to the complaint, the employees carried out a manipulative scheme known as "banging" or "marking"' the close.

"Banging the close" refers to the practice of acquiring a substantial position leading up to the closing period, followed by offsetting the position before the end of trading for the purpose of attempting to manipulate prices.
The agency said the employees in three instances forced futures prices lower and in two instances caused prices to rise.
"Although this alleged energy trading scheme lasted only several days in March 2007, even short-term distortions of prices will not be tolerated by the commission," said CFTC Acting Chairman Walt Lukken.
The CFTC began its nationwide investigation into oil market manipulation last December.
The agency said it still has "dozens and dozens" of energy cases under investigation. (Reporting by Timothy Gardner and Tom Doggett, editing by Matthew Lewis)
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Old 07-24-2008, 08:19 AM   #2 (permalink)
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"In other news today, crude rose $15.50 because folks realized the Feds are coming for them." (just kidding.)

FINALLY, they look into it and start pranging people.
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Old 07-24-2008, 08:24 AM   #3 (permalink)
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Tip of the iceberg my friends, tip of the iceberg.
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Old 07-24-2008, 09:05 AM   #4 (permalink)
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Originally Posted by Superpilot92 View Post
CFTC charges Optiver with oil-market manipulation: Financial News - Yahoo! Finance

Reuters
CFTC charges Optiver with oil-market manipulation
Thursday July 24, 11:41 am ET

WASHINGTON (Reuters) - The U.S. Commodity Futures Trading Commission on Thursday charged global trading fund Optiver Holding BV with manipulating the NYMEX oil market in March 2007. The complaint charged that three employees made about $1 million through manipulation of crude oil, gasoline and heating oil futures on the New York Mercantile Exchange.

According to the complaint, the employees carried out a manipulative scheme known as "banging" or "marking"' the close.

"Banging the close" refers to the practice of acquiring a substantial position leading up to the closing period, followed by offsetting the position before the end of trading for the purpose of attempting to manipulate prices.
The agency said the employees in three instances forced futures prices lower and in two instances caused prices to rise.
"Although this alleged energy trading scheme lasted only several days in March 2007, even short-term distortions of prices will not be tolerated by the commission," said CFTC Acting Chairman Walt Lukken.
The CFTC began its nationwide investigation into oil market manipulation last December.
The agency said it still has "dozens and dozens" of energy cases under investigation. (Reporting by Timothy Gardner and Tom Doggett, editing by Matthew Lewis)
Well that sounds promising at least.
I hope that speculation bill passes and traders will finally have to put their money where their mouth is. I realize that congress is merely pandering to me with that bill but its nice to be pandered to isnt it?
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Old 07-24-2008, 11:27 AM   #5 (permalink)
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I was surprised with that finding, but look at the date of the infraction. It occured in March of 2007. If that's all they found, then something else is responsible for this year's rise in prices. Specualtion is a part of it, but the dollar is the big factor. JMO.
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Old 07-24-2008, 11:27 AM   #6 (permalink)
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The speculation bill is dead in the water. I would like to see nothing more than the end of energy speculation but all indications are that the bill will be moving toward cloture next week.
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Old 07-24-2008, 06:14 PM   #7 (permalink)
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I dont know if a bill that stops speculation is the answer. If you all of a sudden put the kabosh on every business that started making money then you might as well shut down the stock market. As we speak the market appears to be making corrections toward lower oil prices. Give it time and people will be speculating on other businesses just like we've seen in housing, dot coms and oil. I do think congress is an effing joke by not being proactive with this energy problem we face. I remember in 06 when the dems won congress back and said they were going to be the answer to all the problems. Yeah that has worked out well in their 2 years of dismal performance. In fact both parties have been a complete joke when it comes to energy policy.
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Old 07-24-2008, 06:18 PM   #8 (permalink)
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Stopping speculation isnt really the answer, What they need to do is make transparency in the market that will allow everyone to see who is doing what and when. Then it would be easy to see if market manipulation is taking place.
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Old 07-24-2008, 07:30 PM   #9 (permalink)
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Quote:
Originally Posted by Superpilot92 View Post
Stopping speculation isnt really the answer, What they need to do is make transparency in the market that will allow everyone to see who is doing what and when. Then it would be easy to see if market manipulation is taking place.
It is interesting to me, that airline pilots are, for the most part (from a completely nonscientific poll conducted by me, just now, by reading this thread ) marching in lock-step with regards to regulating the energy markets. I don't know if there's been any single (political/economic) issue that has been this unifying for a long time.
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Old 07-24-2008, 08:53 PM   #10 (permalink)
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Speculators were a small part of the reason why they price rose so high. We can expect a much higher jump in the not so distant future. We should consider ourselves lucky to have this break in the rise. If our government is smart they will start implementing alternative ways for us to handle sky high fuel prices when they make it around the bend. The days of cheap oil are over... In 15 years we will all talk about how sweet it was when oil was only $140 a barrel. For us to have any chance, science will have to come up with an alternative.
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