After Bloomberg broke the news of a senior adviser to the chairman of the Commodity Futures Trading Commission (CFTC) intervening in an oil insider trading investigation, social media immediately accused well-connected insiders of using political access and financial derivatives to suppress the price of oil.
According to oil analyst Paul Sankey, either the administration leaks or “somebody very close to the administration is insider trading.”
Meanwhile, Energy Aspects derivatives head Tim Skirrow believes “either someone got very lucky or knew something,” and a Dallas Fed survey respondent wrote, “Our hypothesis is the [oil] paper market is being manipulated.”
Year-to-date, the price of the US Oil Fund ETF is up 151% since before the war in Iran, yet it should be much higher according to many skeptics.
Why isn't oil at $200? Because "someone" keeps dumping oil futures all night long, and the CFTC refuses to look into it. Heck, even when it's clear-cut insider trading, the CFTC has been told to "back off," and they did. https://t.co/Do5mmc1YZR https://t.co/GMXME9xkOz pic.twitter.com/ouUEfdyeQb
The original news was that Mel Gunewardena, a senior adviser to CFTC Chairman Michael Selig, told a CFTC supervisor to retract an oil futures insider trading referral. Donald Trump appointed Selig.
That referral covered oil bets placed minutes before Trump backed off threats to strike Iran’s power plants on March 23. His presidential reversal had an immediate impact on the price of oil and delivered a profitable windfall to the suspicious traders within minutes.
Specifically, those traders had sold over 6 million barrels worth of oil futures contracts immediately prior to Brent contracts falling as much as 14%.
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