Thursday, August 21, 2008

CFTC finds that relatively few companies (like Vitol) have have driven oil futures speculation

Relatively few entities may have a much larger influence on the oil market than had been previously thought. The Washington Post reports today, in a story by David Cho, “A Few Speculators Dominate Vast Market for Oil Trading.” The link is here.

There was particular attention to the futures contracts purchased by a Swiss energy company Vitol, which the Commodities Futures Trading Corporation found involved in inordinate activity buying futures contracts for profit rather than delivering oil. For example, look at this complaint (PDF) There are others that can be found by searching for Vitol there.

In 2007, the AP ran a story (now in the International Herald) that Vitol had paid a $17.5 million fine after pleading guilty in an oil-for-food case, link here.

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