CFTC investigating Big Oil for false oil inventory reports
2 comments Thursday, 09-04-08 | Posted By Patrick | Commentary
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.
I would bet that they will spend months gathering and studying information only to announce that they were unable to determine if anyone did anything wrong. It’s almost impossible to prove if a company did something like that intentionally.
Rack prices dropped less than a penny, so $3.759 is about a 10 cent markup, which isn’t enough. It’s hard to say if Speedway will go up to to $3.859 on Friday, or wait out the weekend to see what happens.
There could be a large swing in prices either way next week depending out which way Hurricane Ike turns.
Given that all our politicians regardless of party are in bed with the oil companies the result of this money wasting investigation will be “no evidence of price fixing”. If you think these prices are bad wait to see what happens if Barrack “Osama” Obama gets in the white house. Look for a huge gas tax increase under him.