U.S. Regulator `Closely Monitoring' Nymex Oil Prices

[Tandalayo_Scheisskopf]

By Tina Seeley

Sept. 22 (Bloomberg) -- The Commodity Futures Trading Commission is ``closely monitoring'' the biggest ever gain in oil prices on the New York Mercantile Exchange for potential manipulation, the agency's acting chairman said.

``We are working closely with Nymex compliance staff to ensure that no one is taking advantage of the current stresses facing our financial marketplace for their own manipulative gain,'' Acting Chairman Walter Lukken said today in a statement.

Crude oil futures contracts rose more than $25 a barrel during trading on the Nymex. Oil settled at $120.92 a barrel, up 17 percent for the day.

The commission took what it called the ``extraordinary step'' earlier this year of publicly stating it began a nationwide investigation last December into trading, transportation, storage and purchase of crude oil.

http://www.bloomberg.com/apps/news?pid=20602099&sid=aK.5kFwU_pEA&refer=energy

Now, I know that with any regulatory agency under this maladministration, especially in the energy sector, the first reaction one would have is to say "Yeah. Whatever.". Me too. That said, this is an announcement you would not have seen a few months ago.

Worms HAVE turned. Not enough, not soon enough for my tastes, but they have turned.

[RB TexLa]

1. The government feels people should not make money because there is a financial crisis?

Are they going to be ready to punish someone if the Dow is up 17% in a day? Oh, wait a rally is good there, nothing to look at, but not a rally in energy.

[DJ13]

2. A rally in stocks doesnt impact the economy directly

A rally in commodity prices does impact the economy directly.

[Tandalayo_Scheisskopf]

3. Two completely different market dynamics.

Two completely different models. The biggest one day rise in the history of the market, a market strategic to our economy and our security.

Do try to keep up.

[Ikonoklast]

4. Today was a classic short squeeze as options expired

Those long on oil could name their price, as the shorts had no options except to buy at any price.

Oil will wander back down to 100 or so.

Less if the economy keeps showing signs of slowing even further.

[tama]

6. Yup

But who was the short? Just some hot money funds (about to go under now?) or also the Federal Governement?

And if it's the Gov that has been seriously shorting, did it bring this Wall Street collapse by shorting the last remaining investment opportunity, the commodity market? Any case, about a week ago there were five big investment banks, today none remains. If that is the case, it would be incorrect to call this shooting one's own leg. This shot was wanked in the pocket and hit the nuts.

[Ikonoklast]

7. My guess would be some of the hedge funds riding commodities down

And they got caught with the dollar tanking over the weekend as more people actually read and came out against the bailout bill as written by the Pugs.

Everyone assumed BushCo could panic Congress into rubber-stamping the thievery, and when they balked, the dollar got beat up overseas.

By the time the NYMEX opened, it was too late for the shorts, and they got hammered.

I hope that Congress looks into these unregulated hedge funds. I swear some of them were moving in tandem shorting the financials and beating them up even further than the market felt it should go. I bet they are steaming at the "Do Not Short" list issued by the SEC.

[galileoreloaded]

5. Thats what happens when the world prices in double digit inflation and dollar destruction...

N/T