Is Someone Playing with Oil?

Source:

The sudden collapse in the futures term structure pricked the Commodity Futures Trading Commission's ears, prompting acting chairman Walter Lukken to pronounce that the agency was working with NYMEX compliance staff to ensure that no one is manipulating the market.

You can't say the shorts didn't see this coming. Oil slipped from its nearly four-month-long contango on Sept. 17. The inversion deepened over the subsequent two trading days. The tip-off that something big was brewing came on Friday, Sept. 19. Over the past 23 years, the nearby quarterly crude oil spread averaged -33 cents a barrel. In other words, the contract calling for delivery three months out from the spot month tended to be 33 cents cheaper....

It's clear somebody went into the weekend with a big bet. What's not so clear is who that might have been and who was hoisting them by their, um, you-know-whats the following Monday. The sudden collapse in the futures term structure pricked the Commodity Futures Trading Commission's ears, prompting acting chairman Walter Lukken to pronounce that the agency was working with NYMEX compliance staff to ensure that no one is manipulating the market.

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