Data provided by iNet BFA
Loading...
See More

US alleges 2008 oil trade fixing

May 25 2011 10:17 AFP

Related Articles

Oil rises above $99

Oil prices slide on fresh demand worries

Oil slips as US demand concerns weigh

Oil falls on stronger dollar

Oil higher on signs of weaker demand

Oil idles near $98 amid debt fears

 

Washington - US authorities on Tuesday accused three companies linked to Norway-born Cypriot shipping and drilling tycoon John Fredriksen of manipulating oil trading on the NYMEX and ICE exchanges in 2008.

The Commodity Futures Trading Commission (CFTC) said it had filed a civil suit against three affiliated companies - Parnon Energy of California, Arcadia Petroleum of Britain, and Arcadia Energy (Suisse) SA of Switzerland - for collaborating to manipulate oil prices in a scheme that netted them $50m in profits.

Also named in the accusation were traders James Dyer of Australia and Nicholas Wildgoose of the United States.

All three of the accused companies are wholly owned subsidiaries of Farahead Holdings, with London-based Arcadia Petroleum the main operating firm in the trading ring.

Farahead is a part of the sprawling shipping, oil drilling and fish farming conglomerate of Fredriksen, the London-based Cypriot citizen who ranked number 72 on this year's Forbes billionaires list with a fortune of $10.7bn.

Fredriksen was not named in the accusations.

The CFTC said that from late 2007 through April 2008, the three companies and the two traders sought to control already tight supplies of the benchmark West Texas Intermediate crude oil with physical purchases of millions of barrels "even though they did not have a commercial need for crude oil."

Tightening the supply of physical crude drove up their WTI futures and options contracts on the NYMEX and IntercontinentalExchange.

After taking profits in that way, the accused shorted WTI contracts and then quickly dumped their physical oil, pushing down the price and delivering more profits to the, the CFTC said.

"Pursuant to this manipulative cycle ... defendants realised profits from their WTI Derivatives trading that exceeded $50m."

The scheme took place at a time when global oil prices were soaring toward a peak near $150 a barrel on a speculative frenzy that collapsed, driving price down to nearly one fifth of the high.

The CFTC said the traders reported to the unnamed chief executive and head trader of Arcadia Petroleum, who "performed the functions of CEO for Parnon and Arcadia Suisse."

It also said they halted the scheme when they discovered they were being investigated by the CFTC.

commodities  |  oil
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

A cash flow crunch often occurs in small businesses trying to balance cash coming in with cash going out. Watch this video to help you improve.
 
 

How you get trapped by debt

Borrowing money is so quick, so easy - and so deadly, says Susan Erasmus.

 
 

Start saving...

Time the key for retirement saving
Dummy's guide to saving
Save money with affordable account
All about endowments

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...