British Commodity Trading Firm Admits Manipulation Of International Oil Prices

Oil brokerage PVM names rogue trader behind oil spike

Reuters

By David Sheppard David Sheppard Fri Jul 3, 8:40 am ET

LONDON (Reuters) – PVM Oil Futures Limited said on Friday Steve Perkins, a senior broker based at the firm’s London office, was responsible for unauthorized trades earlier this week which landed the firm with a loss of nearly $10 million.

The London-based brokerage said Perkins had taken the positions in Brent crude futures early on Tuesday.

The heavy buying during the Asian trading day when volumes tend to be lower caused global crude prices to spike to their highest level this year. Traders and analysts initially struggled to explain the price move.

Brent was trading at about $66 a barrel on Friday, down from the high of $73.50 struck on Tuesday.

After discovering the trades, PVM said in a statement on Thursday it had closed them out “in an orderly fashion,” resulting in losses approaching $10 million.

It said its brokers were not authorized to take positions in the crude oil markets. Oil brokers generally help to match up trading counter-parties such as banks and hedge funds rather than dealing themselves.

PVM confirmed Perkins was a Brent crude futures broker, but declined to discuss his possible motivation for the unauthorized trades. (political or financial or both)

The brokerage said on Thursday PVM was conducting a full investigation and it had informed the Financial Services Authority (FSA), Britain’s regulatory body, as well as the InterContinental Exchange (ICE) (ICE.N), where the majority of Brent futures trade takes place.

PVM is the world’s largest independent broker, trading more than 100 million barrels of over-the-counter and oil futures a day on average. The company said it had met all margin calls caused by the unauthorized trades and was conducting business as usual.

In May, the FSA banned a former Morgan Stanley (MS.N) trader who built up a hefty unauthorized oil futures position following a long liquid lunch, before hiding the deals overnight.

REGULATION

Excessive speculation in oil and commodities markets has been high on the regulatory agenda since crude prices soared to a record of nearly $150 a barrel last July.

PVM head David Hufton has been an outspoken critic of oil market speculation, describing some exchanges as “electronic oil casinos” that boost the price of oil.

Oil analysts said this week’s events could add further ammunition to those already pushing for tighter regulation on futures exchanges and over-the-counter markets following last year’s price surge and the global financial crisis.

The U.S. government wants to boost oversight of commodity markets and expand the power of the Commodities Futures Trading Commission (CFTC), including looking at tightenening the number of speculative positions any one firm or trader can hold.

Analysts said the FSA was expected to follow any moves to reduce position limits taken by its U.S. counterpart in commodity markets.

(Reporting by David Sheppard; additional reporting by Alex Lawler in London and Yaw Yan Chong in Singapore; editing by William Hardy)

http://news.yahoo.com/s/nm/20090703/bs_nm/us_pvm_trade_4   http://www.reuters.com/article/governmentFilingsNews/idUSL336867120090703   http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article6628545.ece  

So much for all the talk about how increasing oil prices are an indication of the recovering U.S. economy. The price increases have nothing to do with supply and demand. Specualtors, both financial and political are manipulating the price of oil and gasoline. Additional regulation is fine but the real answer lays in “Drill Baby Drill”, develop all of America’s Oil, Gas and Nuclear potential. What happened to last year’s election time “pledge”, when even the Democrats promised to “Drill Baby Drill”. Can’t believe a damn thing they say can we …..  isn’t it ironic that today marks the 1 year anniversary of $145 a barrel crude – http://money.cnn.com/2009/07/02/markets/year_oil/index.htm

In Decemebr 2008 the price of crude dipped to $33.87 a barrell. http://money.cnn.com/2009/07/02/markets/year_oil/index.htm

Crude Oil at $48.88/Barrel – Gasoline $1.13 Gallon / International Stocks Slow Loss Rate

Dated Brent Spot  $48.88 Barrel

NYMEX RBOB Gasoline Futures  $1.13 Gallon

http://www.bloomberg.com/energy/

DOW JONES        – 94                8400

FTSE 100

81.95

-1.95%

4,126.60

XETRA-DAX

-73.94

-1.61%

4,505.53

CAC 40

-50.67

-1.57%

3,166.73

HANG SENG

-100.09

-0.77%

12,815.80

NIKKEI 225

-55.19

-0.66%

8,273.22

http://money.cnn.com/data/premarket/index.html

Will DJIA fall below 8000 – International Markets Down – Gas/Oil Futures Lower

Dow Jones        -118              8145          11/18         07.21 AM

FTSE 100

-70.27

-1.70%

4,061.89

XETRA-DAX

-93.22

-2.05%

4,464.05

CAC 40

-57.01

-1.79%

3,125.02

HANG SENG

-613.64

-4.54%

12,915.89

NIKKEI 225

-194.17

-2.28%

8,328.41

http://money.cnn.com/data/premarket/

Dated Brent Crude            $49.10 Barrel        -0.62

NYMEX RBOB Gasoline Futures      $1.16 / Gallon     – 0.113 

http://www.bloomberg.com/energy/

Will we see a floor at a 7500 DJIA, $45/Barrel Oil and $0.95/Gallon Gasoline? 

Dow Down – Crude Oil Futures Below $50/Barrel – Gasoline Below $1.20

Dated Brent Spot         $49.72 Barrel          -$1.27

NYMEX RBOB GASOLINE    $1.17 Gallon         -0.064

http://www.bloomberg.com/energy/

Dow

-223.73

-2.63%

8,273.58

NASDAQ

-34.80

-2.29%

1,482.05

S&P

-22.54

-2.58%

850.75

FTSE

-100.81

-2.38%

4,132.16

DAX

-152.97

-3.25%

4,557.27

Nikkei

+60.19

+0.71%

8,522.58

Will Oil Futures find a floor at $45/Barrel, Gasoline at $0.95 Gallon and the Dow at 7500?

Will Oil Drop Below $50 Barrel? Gasoline at $1.25 Gallon

Dated Brent Spot $51.68 -2.50 -.0461 14:38
Nymex RBOB Gasoline Future $1.25 -.0479 -.0368 14:07

http://www.bloomberg.com/energy/

Oil Futures Drop to $56 / Barrel – Gasoline $1.32 Gallon / Global Stocks Down

Dated Brent Spot

56.10

-1.59

-2.76

07:08

Nymex Crude Future

59.68

-2.73

-4.37

06:38

http://www.bloomberg.com/markets/commodities/energyprices.html

S&P 500

-14.90

906.60

11/11 7:16am

 

Fair Value

 

917.80

11/10 10:17pm

Difference*

 

-11.20

 

NASDAQ

-17.50

1239.00

11/11 7:08am

 

Fair Value

 

1251.68

11/10 10:17pm

Difference*

 

-12.68

 

Dow Jones

-142.00

8745.00

11/11 7:11am

DJIA Contracts

FTSE 100

-108.08

-2.45%

4,295.84

XETRA-DAX

-136.22

-2.71%

4,889.31

CAC 40

-103.67

-2.96%

3,402.08

HANG SENG

-703.73

-4.77%

14,040.90

NIKKEI 225

-272.13

-3.00%

8,809.30

 

U.S. Dollar vs Euro

-0.0048

-0.38%

1.2701

 

U.S. Dollar vs Yen

-0.1300

-0.13%

0.0102

 

U.S. Dollar vs UK £

-0.01

-0.54%

1.5

http://money.cnn.com/data/premarket/index.html

“The oil market is coming down into line with demand expectations,” said Simon Wardell, oil analyst at Global Insight in London.

“There’s more downside weakness here than upside strength. We are expecting prices to go lower before they go higher with U.S. crude hitting $50 before its reaches $65 again.”  

Oil has shed 60 percent of its value since hitting a record high $147 in July.  http://news.yahoo.com/s/ap/20081110/ap_on_bi_ge/oil_prices_11

The run up in Oil during the 6 months that preceeded the election had little to do with demand and consumption. Oil demand and supplies had only incresed slightly prior to the run up. Oil producing countries had “excess” capacity prior to the run up. (They had the ability to pump more oil as demand rose).

Opec sets oil production levels to obtain a predictable price range.

OPEC President Chakib Khelil said the oil producers’ target prices for was $70 to $90 per barrel. http://economie.moldova.org/stiri/eng/163913/  

A significant factor in the post election run up of crude oil prices was financial speculation.

“We still have this connection between the oil market, the equity markets and the currency markets,” Ritterbusch said. Crude is bought and sold in dollars, and when the dollar falls against foreign currencies, investors often sell the U.S. currency and buy oil. Oil prices are also experiencing some spillover from the equity markets, in which any significant rise “conjures up images of a softer economic landing,” Ritterbusch said.  http://news.yahoo.com/s/ap/20081110/ap_on_bi_ge/oil_prices_11

Oil prices have fallen about 56 percent since reaching a record $147.27 in mid-July, and that’s provided some good news for U.S. motorists. In Tulsa, Okla., at least one station was selling regular gasoline for $1.79 and there were a handful of states where the average price of gasoline fell below $2.

http://news.yahoo.com/s/ap/20081110/ap_on_bi_ge/oil_prices_11

 

Gasoline Futures Drop Below $2.00 / Gallon /ASIAN MARKETS DOWN

Gasoline Futures $1.98 a Gallon – WHERE IS OUR RELIEF AT THE PUMPS?

Dated Brent Spot Brent Crude $83.22/Barrel

http://www.bloomberg.com/energy/

 

HANG SENG                   Down 1,372

NIKKEI                            Down 953              

DJIA                                      + 102

http://money.cnn.com/data/premarket/

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