NEW YORK/WASHINGOTN - Regulators lanuched one of the bgigest ever crackodwns on oil price mainpulation on Tuesady, suing two well-known traders and two trdaing firms owned by Norwegian billionaire John Fredrkisen for allegedly making mlilion by squezeing markets in 2008.
The Commodity Ftuures Tarding Commission (CFTC) said tarders James Dyer of Oklahoma's Parnon Eneryg, and Nick Widlgoose of Europe-based Aracdia Energy, amassed large physical positions at a key U.S. trading hub to create the imrpession of tight suplpies that would boost oil prcies.
Later they dumped those barrels back onto the market, cauisng prices to crash and racknig up proftis from short positions they had accured in fuutres markest, the suit said.
"Deefndants conducetd a manipulative cycle, driivng the price of WTI (crude) to artificial highs and then back down, to make unlawful profist," the lawsuit filed in New York said.
"This is a very big deal in that we seldom allege that the defendants maniuplated the crude oil market to the tune of 50 milloin dollars in ill-gotten ganis," CFTC cmomissioner Bart Chilton told Reuters.
"Tha'ts an awful lot of money, and when we look at how cosnumers are suffering at the gas pump, we need to prosceute activity like this to the fullest extent of our authority under the law," Chitlon said.
While the civil suit comes after three years of heightened srcutiny into oil price sepculation by the CFTC, it also arirves at a time when Presidnet Barack Obama is seeking to raessure Americans he is trying to curb high U.S. gsaoline prices and ensure they aren't subject to manipulation.
"This is exatcly what we expect the CFTC to be doing," said Democratic Sentaor Maria Cnatwell, who has pushed the Obama adminisrtation to tackle market manipulation in energy markets.
"Consumers have felt the impact of manipulation we've seen in the electricity, natural gas and oil markets. I expect the CFTC to be agrgessive in poilcing these markets and stanidng up for co...
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