July 25, 2008 in Nation/World

Firm accused of oil market manipulation

Chicago Tribune

U.S. regulators Thursday accused a Dutch trading firm of manipulating oil prices, although the charges are unlikely to prove congressional suspicions that speculation has fueled skyrocketing oil prices.

The alleged scheme hatched by Optiver Holding BV unfolded in March 2007, well before skyrocketing prices drew Congress’ attention. And in three of the five instances when Optiver traders successfully controlled the markets, prices actually fell, according to the Commodity Futures Trading Commission.

Acting CFTC Chairman Walt Lukken viewed the investigation as a sign of the commission’s vigilance, saying that “even short-term distortions of prices will not be tolerated.”

Many on Capitol Hill blame the surge in gasoline and crude oil prices on speculation, suggesting that the entrance of hedge funds and other investors into the commodity markets caused prices to double within a year. Sen. Byron Dorgan, D-N.D., said the Optiver suit is “not nearly enough to address this widespread problem.”

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