Report: 1 trader held 11 percent of oil contracts - East Valley Tribune: Business

Report: 1 trader held 11 percent of oil contracts

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Posted: Friday, August 22, 2008 12:32 am | Updated: 8:58 pm, Fri Oct 7, 2011.

NEW YORK - A single energy conglomerate held 11 percent of all contracts on the New York Mercantile Exchange at one point last month, according to a published report Thursday, suggesting that speculators may have played a larger part in volatile oil markets than once thought.

The Commodity Futures Trading Commission made an unusual request last month for data from Vitol Group, a private Swiss energy company that regulators thought was helping industrial firms get the oil they needed, according to The Washington Post.

The commission discovered, however, that the Vitol would be better described as a speculator, trading oil contracts to turn profits rather than assisting companies that actually needed oil delivered for their operations.

The report comes one month after the Interagency Task Force on Commodity Markets, chaired by the commission, released an interim report saying record oil prices were the result of “fundamental supply and demand factors.”

“It is now evident that speculators in the energy futures markets play a much larger role than previously thought, and it is now even harder to accept the agency’s laughable assertion that excessive speculation has not contributed to rising energy prices,” said Rep. John Dingell, D-Mich.

Dingell told the Post it was “difficult to comprehend how the CFTC would allow a trader” to acquire such a large oil inventory “and not scrutinize this position any sooner.”

A number of lawmakers have blamed speculators for the spike in oil prices and last week, four Democratic senators asked for an investigation into the commission’s report, which they said was based on flawed information.

The commission never named Vitol.

The Wall Street Journal identified the company in a report Wednesday which cited unidentified people familiar with the matter.

The Post cited two anonymous sources that it said had direct knowledge of the commission’s request in their report.

The commission investigation showed Vitol was one of the most active traders of oil on Nymex as prices reached record levels.

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