Arcadia fights back against oil speculation charges
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
London-based oil trading house Arcadia Petroleum has strongly denied charges by the CFTC that it manipulated oil markets in 2008, Reuters reports. The CFTC’s claims were wrong “on both the facts and the law,” according to an Arcadia statement. The rebuttal sets the scene for a rare showdown in court over practices in the physical oil market and derivatives trading — a largely untested area for regulators, says the FT. The CFTC says that traders created the impression of a shortage in the market, lifting futures oil prices, and shortly afterwards dumping the barrels into the market, depressing prices. However, Arcadia says it never had a significant trading position that could benefit or suffer from a rise or fall in the price of West Texas Intermediate oil throughout the period under scrutiny by the CFTC.
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