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Rogue oil broker blamed for price spike
A rogue oil broker allegedly caused a large spike in the Brent Crude oil market on Tuesday (30 June), triggering up to £6m of losses.
According to FTAdviser’s sister paper the Financial Times, PVM Oil Associates said it had been the victim of unauthorised trading and as a result had been forced into the loss.
"As a result of a series of unauthorised trades, substantial volumes of futures contracts were held by PVM. When this was discovered, the positions were closed," it told the Financial Times.
According to the paper, the unauthorised trading caused a spike in prices on Tuesday 30 June.
Prices rose by more than $2 a barrel in the early hours of Tuesday morning, rising from $71 to $73.5 in just one hour.
It also said futures contracts for 16 million barrels of oil changed hands within that hour, instead of the usual 500,000 barrels.
Traders reportedly said the rogue broker accounted for at least half the unusual activity.
It is believed the Financial Services Authority (FSA) has been informed of the incident.
In May, the FSA banned Morgan Stanley oil and freight trader David Connor Redmond for seeking to conceal his trading position.
