Oil Speculators Charged In Price Manipulation

Oil Speculators Charged – Federal regulators have charged five speculators for manipulating the price of crude oil. The five men reportedly pocketed $50 million from the scheme. It all took place sometime between January and April of 2008, which was during the time when the price peaked at $147 a barrel.

The speculators charged in the suit are Parnon Energy Inc. of California, Arcadia Petroleum of the United Kingdom, Swiss-based Arcadia Energy, James T. Dyer of Australia and Nicholas J. Wildgoose of California. The companies bought much of the crude oil in Oklahoma, which in turn caused it to look like there was a shortage. As many would expect a shortage means an increase in price.

The companies then sold “short” contracts to other investors at higher prices, usually no more than $10 a barrel, but it starts to add up. The Commodity Futures Trading Commission, responsible for finding illegal actions in accordance to oil, continually check from companies manipulating oil prices. While many feel more investors and companies are doing such actions the CFTC is assuring it’s not happening.

To reassure that prices are being manipulated even more Obama has launched an investigation into more speculations. As of now the five companies responsible for the manipulation are said to receive civil charges resulting in a few fines here and there. Although it is possible that in the later the companies face criminal charges by the Justice Department.

Leave a Reply

Your email address will not be published. Required fields are marked *