Thursday, May 23, 2013
"Here is my letter to the FSA last year regarding the alleged "Oil Price Fixing" and their subsequent response. I welcome your comments...... in light of recent developments" Quentin Willson
The Financial Services Authority
25 The North Colonnade
18th September 2012
Dear Lord Turner,
As spokesman for FairFuelUK, I’ve enclosed
the testimony of an oil trader who claims that market manipulation of the
benchmark price of crude oil has become routine. This I believe is a very significant
document and was read out last week in the House of Commons by Robert Halfon MP
on behalf of FairFuelUK.
While anonymous, the source of this
worrying information has declared that they are prepared to work with the FSA
and Bank of England to help establish a clearer picture of the level of oil
rice manipulation that may be going on in the oil futures and commodities
I also believe that if this information can
be properly proved it’s potentially as serious and reprehensible as the recent
LIBOR rate rigging. The practice of deliberately moving up the price of oil for
profit will cause substantial damage the UK economy and its fledgling recovery.
I respectfully ask the FSA to investigate
this information further as matter of great urgency. The exact source of this
testimony can be found at Robert Halfon’s office at the House of Commons. Additionally, my colleague, Peter Carroll of
FairFuelUK stands ready to help you in any way.
Statement from an Oil-Trader:
- "I trade the oil market on a daily basis, and every day the price is manipulated - not just the daily benchmark price but the calendar spreads that make up a large part of the daily volume. All through July, for example, there has been a massive buying-pressure on oil futures for August and September 2012. Both were trading at around a $0.5c to $1 dollar premium. This gives a false impression of the market and inflates the price of the nearby oil price, making prices higher on retail markets so pushing up the price of petrol at the pumps.”
- "The FSA and the OFT should be asking: Why is the London market distorted, with prices kept artificially high? Who is pushing through these massive trades, to force up oil prices? Who is benefiting from this market manipulation? There is no fundamental need for the market to have a $1 dollar premium, for the price of September delivery over oil for October delivery. It seems to be a case of we can can do it so we will do it, and to hell with the damage it does to the country on the way. There is no world oil crisis. There is ample oil in the system to satisfy demand at the moment. Profiteering seems to be the only objective."
- "More specifically, the spreads are manipulated during the day and especially at certain times of the day when official prices are set. This is how some contracts are priced and passed on to the consumer. This movement is not the way a free market should trade, and moves in a way that bears no relation to economic fundamentals.”
- "One part of the problem is a lack of market transparency. In the oil futures market, huge volumes are offered and then withdrawn without trading - and unlike stocks and shares where large holdings have to be declared, in the oil market nobody knows where the money is coming from and who is ultimately profiting as a result. For example, large oil futures volumes are often placed on a bid, and then instantly withdrawn and a reverse offer is placed. There is no reason for this behaviour other than to distort market prices.”
- "Prices are particularly manipulated at the close of business, when "markers" are set on an average of trades in the last three minutes of the trading session. Every day, around these times, I see that the structure 04 September 2012 page 9 of the market is being moved to bring prices in line with the trading books of whoever is manipulating the market with huge volumes of trades. This is in order to fix the price and make sure a profit is shown on their books.”
- "I stand ready to work with the F.S.A., and the Office of Fair Trading, to help uncover this market manipulation in more detail." 04 September
The FSA's response to me and FairFuelUK
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