June 26th, 2011
Econontersect: Could government officials (or people to whom they leaked the information) have made insider trades in oil ahead of the coordinated decision last week by the U.S. and the IEA (International Energy Agency) to release millions of barrels of oil reserves into the the world market? The Telegraph has reported that an investigation of just such possible activity is under way by the CFTC (Commodity Futures Trading Commission) in Washington, DC. Follow up:
Follow up:From The Telegraph:
The Commodity Futures Trading Commission (CFTC), which is based in Washington DC, is reported to be examining potentially unusual trading patterns in the oil-futures market before the decision was made public on Thursday.
A spokesman for the CFTC declined to comment.
The IEA’s move to release 60m barrels of oil sparked an immediate sell-off on Thursday, with oil falling $5. The price dropped a further $4 a barrel in London yesterday on worries about the stability of the eurozone and the world’s economic health.
If the investigation finds out that members of congress participated in any such trading in advance of the public announcement, there is absolutely nothing that can be done about it. As reported in GEI News June 24, members of the House and the Senate are exempt from penalties for violating insider trading laws. How did that happen? That's the way the legislation was written and passed.
Hat tip to Roger Erikson.