Regulators had long classified a private Swiss energy conglomerate called Vitol as a trader that primarily helped industrial firms that needed oil to run their businesses.
But when the Commodity Futures Trading Commission examined Vitol’s books last month, it found that the firm was in fact more of a speculator, holding oil contracts as a profit-making investment rather than a means of lining up the actual delivery of fuel. Even more surprising to the commodities markets was the massive size of Vitol’s portfolio — at one point in July, the firm held 11 percent of all the oil contracts on the regulated New York Mercantile Exchange.
The discovery revealed how an individual financial player had gained enormous sway over the oil market without the knowledge of regulators. Other CFTC data showed that a significant amount of trading activity was concentrated in the hands of just a few speculators.
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Tags: CFTC, Commodities, Credit Crisis, Economy, Enron, Futures, Goldman Sachs, Morgan Stanley, NYMEX, Oil, Oil Futures, Oil Prices, Speculators, Trader, U.S., Wall Street
“There may have been multiple ‘positions’ which were reclassified … but they all appear to have been held by just one trader, and this was a very special trader, with an enormous concentration of positions in crude oil amounting to perhaps 460 million barrels, and not much interest in anything else,” noted John Kemp of RBS Sempra Commodities.
NEW YORK (Reuters) – A quiet data revision that has boosted by nearly 25 percent the number of oil futures contracts U.S. regulators think are held by speculators is raising eyebrows in the energy trading community.
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Tags: Bankruptcy, Barclays, Commodities, Futures, Justice Department, NYMEX, Oil, Oil Futures, Oil Prices, RBS, SemGroup, Speculators, Trader, U.S.
NEW YORK (AP) — Crude oil prices rose to within a penny of $114 a barrel Tuesday, setting a new record as concerns mounted about global supplies. U.S. retail gasoline and diesel prices also struck new highs.Traders honed in on a report by the International Energy Agency that said Russian oil production dropped this year for the first time in a decade. The report raised concerns about whether the key oil-producing nation will have enough supply to help feed growing global demand.
“In an emotionally driven market like we’ve got now, it just doesn’t take much in the way of a headline to prompt a psychological response,” said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Ill. Continue reading »
Tags: barrel, Diesel, Dollar, Gas prices, gasoline, Mexico, Nigeria, NYMEX, Oil, Oil Futures, Russia, Shell, Trader
The alternative trading systems are luring big institutional customers by offering greater privacy and lower costs. Their growth could affect big exchanges.It’s not easy being a big player in the stock market. Trading huge quantities of stock on traditional exchanges has become ever more challenging, costly, and potentially disruptive. And if other players see your moves, they can disrupt your trades. That’s led to the emergence in recent years of alternative trading systems known as dark pools. And their growth could have significant implications for big stock exchanges-and individual investors. Continue reading »
Tags: Dark Pools, Lehman Brothers, Merrill Lynch, NYSE, Stock Market, Trader