Thursday, September 4, 2008

WSJ: CFTC Probes Oil-Supply Data For Manipulation

Okay, she's got my vote.
That would be Ann Davis of the Wall Street Journal.
Talk about a pit bull in lipstick, she has been digging away in some arcane/obscure/opaque parts of the oil markets for going on a year now. Last October she started out in Cushing Oklahoma with "Where Has All The Oil Gone?". On July 7 it was "Oil: Commodities Regulator Under Fire". We saw her last month in "Oil, Computers, and Momentum Trading" and then two weeks ago in "'Speculator' in Oil Market Is Key Player in Real Sector".
Today, front page of the Journal's Money & Investing section:

CFTC Regulators Look at Energy Firms,
Take Depositions About Oddball Trading

Commodity-market regulators are investigating whether energy-market players are injecting false data into the marketplace to influence perceptions about crude-oil supply and demand, people familiar with the probe say.

Among other things, regulators are concerned that companies may be reporting inventory levels that benefit their own trading positions but that may not be accurate, people familiar with the regulators' thinking say.

[oil markets chart]

Unexpected drops in oil inventories reported each Wednesday by the U.S. Energy Information Administration can spark price spikes on the main oil futures benchmark on the New York Mercantile Exchange. A company could theoretically underreport barrels in its tanks, for example, at a key hub to suggest oil is scarcer than it really is, and then sell its physical oil at a premium when oil prices jump on misleading news....Continued

Columbia Journalism Review, are you getting all this?

I don't know if that continuation link will be good tomorrow, if not CattleNetwork has the story.