Somebody Knew about that IEA news
With 28 countries involved, quite some people knew about the Big oil news of the week. Let the hunt on insider begin. Dow Jones reports;
U.S. commodity regulators are examining whether traders received early word of a decision to coordinate a release of global oil stockpiles ahead of Thursday’s announcement by the International Energy Agency, according to a person familiar with the matter.
Officials with the U.S. Commodity Futures Trading Commission as well as market participants have said trading was unusual in the oil futures market prior to the IEA’s announcement that it would release 60 million barrels of oil, the person said.
The CFTC is reviewing market data to find clues as to whether some traders may have received an advance tip on the IEA’s plan, the person said.
The IEA, a Paris-based agency that represents 28 of the world’s largest oil consuming nations, announced the move early Thursday, sending oil futures falling 4.6% to a four-month low of $91.02 a barrel on the New York Mercantile Exchange. ICE Brent futures saw an even steeper drop, declining by 6.1% to $107.26 a barrel.
Analysts and traders said they noticed irregular trading prior to the official release of the report, and beginning Thursday raised concerns that some traders may have heard of the decision early. Others in the market attributed the decline to weak U.S. jobs data and concerns about Greece’s debt crisis.
“Twenty-eight countries–it’s tough to keep a secret,” said Dominick Chirichella, analyst at the Energy Management Institute in New York. “I don’t know how you keep a secret from the oil market when there are that many countries involved.”
The source described the CFTC’s actions are a preliminary step. In cases of this type, the agency will often try to work with foreign regulators to determine if suspicious trading patterns originated in other countries outside of the CFTC’s jurisdiction.
A CFTC spokesman declined to comment.