News this noon from WSJ that oil companies may have reported false oil inventory levels to benefit their positions:
The U.S. futures market regulator is investigating whether companies are reporting false oil inventory levels to benefit their trading positions, The Wall Street Journal reported on Thursday.
The paper, quoting people familiar with the probe, said the Commodity Futures Trading Commission is taking testimony on periods when there have been big moves on the oil futures market, including July 2007.
The commission is concerned that companies may have tried to manipulate short-term pricing on oil markets through physical oil sales and purchases, the Journal reported.
According to the report, companies could also theoretically push prices higher by under-reporting oil inventory and then sell their oil at a premium.
The commission is also seeking data about what companies report to the Energy Information Administration, which reports oil inventories each week, the Journal reported.
The paper said this CFTC probe is a part of the larger investigation the commission launched last December into possible manipulation of the market.
Wow, can’t say I’m surprised. I had a feeling this could have been happening for some time, yet no one can really know who is fixing the numbers submitted to the DOE.
Go get em. This could been have greatly effecting prices in a negative way.