Dutch trading firm charged with manipulating oil futures

Dutch trading firm charged with manipulating oil futures

Posted: Saturday, August 9, 2008 6:55 pm
By: By JOHN BRANNON Messenger Staff Reporter

Comes now even more evidence to support my suspicions that greedy speculators are at least partially responsible for the high pump prices of gasoline and diesel fuel. A Dutch global trading fund — Optiver Holding BV — has been charged by the Commodity Futures Trading Commission with “manipulation and attempted manipulation of crude oil, gasoline and heating oil prices,” according to a report in the July 25 issue of The Wall Street Journal. Named in the complaint are Optiver, two of its units (subordinate offices) and three employees. CFTC, described as the U.S. futures market regulator, is based at Washington. “The complaint charges defendants with 19 separate instances of attempted manipulation on 11 days in March 2007. In at least five of those attempts, the fund successfully caused artificial prices,” the CFTC said. CFTC quotes Christopher Dowson, head trader for Optiver US, as saying he and another Optiver trader decided to “just whack the oil.” CFTC also cited Optiver Chief Executive Bastiaan van Kempen as saying, “You should milk it right now as much as you can, because you never know how long this thing is going to last.” CFTC has filed an enforcement action in the U.S. District Court for the Southern District of New York. Named in the complaint are Dowson, van Kempen and randal Meijer, head of trading and supervisor of the subsidiaries. The defendants alledgedly profited by about $1 million in their schemes. They have undoubtedly gotten the attention of market regulators. “Under pressure to act with oil at record prices, CFTC has recently moved to tighten oversight of energy markets,” WSJ reports. “In an extraordinary action, the agency disclosed in late May that it had started a wide-ranging probe into crude oil markets at the end of 2007, ‘into practices surrounding the purchase, transportation, storage and trading of crude oil and related derivative contract.’” Dozens of similar investigations are under way, according to WSJ. CFTC’s enforcement chief, Stephen Obie, discussed the case July 24 at a news conference. On that day, crude oil traded at $125.49 a barrel, down from a previous high of $147 a barrel. WSJ refers readers to its Web site (WSJ.com/OnlineToday) for more info. All of this investigation stuff is welcome news. But will we ever see reasonable pump prices again? I notice that whenever crude oil hits a new high, it’s only a couple of hours before a new and higher price is posted on the marquees of convenience stores and such places. But whenever crude oil drops, as it has done recently, a corresponding drop in prices at the pump doesn’t show up until much later, if then. Hmmmmm…. I wonder, do these oil companies think the public is just plain stupid or something? Apparently, they do. Will we ever see reasonable prices at the pump again? Not in a million years. Published in The Messenger 8.8.08

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