Rogue oil trader pushes up prices

Jul 4 2009 by Iain Laing, The Journal

AN alleged rogue trader is under investigation after he cost his company £6m and pushed oil prices to an eight-month high.

Exchange ICE Futures Europe – where bets on the price of oil can be placed months ahead using futures contracts – is probing the flurry of trading in the early hours of Tuesday morning.

Oil broker PVM Oil Associates was forced to unwind the series of unauthorised trades – widely reported to have been made by its senior broker Steve Perkins.

The trades pushed the price of Brent crude futures up by more than $2 to its highest level this year above $73 a barrel.

ICE Futures Europe’s president and chief operating officer David Peniket refused to comment on individual cases, but said the body would investigate unusual trading activity as a “matter of course”.

Traders can use ICE Futures Europe to buy or sell crude oil for delivery in several months’ time, effectively betting on whether prices will go up or down.

During the early hours of Tuesday morning, futures contracts for 16 million barrels of oil reportedly changed hands in one hour, compared with a typical volume of 500,000 barrels.