US oil speculators fined for $100-a-barrel "vanity trade"

[Joanne98]

The US commodities regulator has imposed a $12m (£7.7m) fine on oil traders responsible for speculatively pushing the price of oil above the $100-a-barrel mark for the first time in January 2008.

The Commodities and Futures Trading Commission (CFTC) fined a former division of ConAgra Foods for its involvement in the so-called "vanity trade" which was responsible for purposefully pushing up the price on the New York Mercantile Exchange (NYMEX).

The levy is intended to send a clear message that the regulator is intent on finding and fining those individuals and companies which were responsible for pushing oil to $147-a-barrel by July 2008.

The surge in oil prices was blamed on speculators by regulators on both sides of the Atlantic, and has led to increased scrutiny in the crude oil market. The increase in fuel prices hurt road and air travel, and exacerbated the onset of the global recession on large parts of the economy.

The "vanity trade" occurred on January 2, 2008, when a oil trader bought 1,000 barrels for $100 each when the prevailing price was 40 cents lower.

At the time, it was not known who the end client was. But the CFTC penalty order states that the client was ConAgra Trade Group (CTG), a division of ConAgra Foods, the US food conglomerate.

"CTG was the first to purchase NYMEX crude oil futures contracts at the then-historic price (also known as a "print") of $100," reads the CFTC's order. The fine was levied for manipulating the market, and creating an inflated price.

http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/7950879/US-oil-speculators-fined-for-100-a-barrel-vanity-trade.html

They're doing it again right now and it won't stop until their all in jail or dead!

[Gman]

1. Actually, if they're all in jail or dead

they'll find someone else to gladly do it.

[white cloud]

2. Get the rope

12 million ain't nothing to them