Feds Think Bad Data May Feed Oil Spikes

Broad market probe focuses on price-fixing weak spots
By Jim O'Neill,  Newser User
Posted Sep 4, 2008 10:01 AM CDT
Gas prices posted at Gas Depot station in San Jose, Calif., Aug. 12.   (AP Photo)
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(Newser) – Commodity regulators, worried that some companies are manipulating crude oil prices by reporting false numbers on supplies and sales, are conducting a wide-ranging probe focused on energy traders, the Wall Street Journal reports. Sources say a big worry is that firms are falsely reporting oil inventories to create the perception that oil is scarce and drive prices higher.

The probe was launched after the Commodity Futures Trading Commission received several tips from industry sources. The CFTC has been investigating such matters as far back as 2005, but is focused on mid-2007, when oil prices became more volatile. It has been criticized in the past for not regulating the industry aggressively enough.