US regulator to 'scour' Monday crude oil trading

22 September 2008 23:42  [Source: ICIS news]

HOUSTON (ICIS news)--The US futures regulator warned oil market participants on Monday that it would "scour" the day's stunning jump in the expiring October crude contract in an effort to detect any manipulation.

The Commodity Futures Trading Commission (CFTC) said the probe would be part of its ongoing investigation into US crude oil and refined products trading.

"CFTC surveillance and enforcement staff are closely monitoring today’s large movement in the price of crude oil," CFTC acting chairman Walter Lukken said in a statement. 

"We are working closely with NYMEX compliance staff to ensure that no one is taking advantage of the current stresses facing our financial marketplace for their own manipulative gain," he said.

The CFTC reminded market participants that it has the power to compel testimony under oath and to force the disclosure of information concerning the crude oil markets, including recent activity.

The October light sweet crude contract, which expired at the end of Monday's session, soared more than $25/bbl to a peak at $130.00/bbl before settling at $120.92/bbl.

Market observers attributed the spectacular surge to short-covering and to the ongoing turmoil on world financial markets. A crisis in the US banking system has prompted a massive financial bailout package now being hammered out by the US government.

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By: Stephen Burns
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