Oil traders sold futures equivalent to at least 6 million barrels of crude in just two minutes on March 23, shortly before President Donald Trump backed away from threats to strike Iranian power plants. Now, the federal regulator overseeing those trades says it has been looking into the activity.
Commodity Futures Trading Commission Chairman Michael Selig said Friday that the agency’s enforcement division has been examining oil trading during the Iran war, including the unusual surge preceding Trump’s announcement.
“Our enforcement division has been looking at all these trades,” Selig told Bloomberg Television. “We take this stuff very seriously.”
The March 23 selling involved Brent and West Texas Intermediate futures. Trading volume during the two-minute window was more than 8.5 times the volume recorded during the same period over the preceding week, according to Bloomberg.
The timing has raised questions about whether some traders had advance knowledge of Trump’s plans.
Oil markets have been particularly sensitive to presidential announcements since the Iran war began in February, with threats of military strikes and subsequent reversals capable of triggering sharp price swings.
The March 23 trades weren’t the only unusual activity. Bloomberg previously reported several spikes in oil trading volumes ahead of major Trump announcements this spring, raising concerns about the possible use of nonpublic information.
Selig did not identify any traders involved or disclose whether investigators had uncovered evidence of wrongdoing.
“We are on top of this and, rest assured, people can have confidence in the markets as long as I’m in the seat,” Selig said.
The CFTC chairman also addressed oversight of prediction markets, which the agency is monitoring for possible manipulation ahead of November’s midterm elections. Selig expressed disappointment that Congress had failed to pass the Clarity Act, legislation addressing cryptocurrency regulation.
The CFTC has yet to announce any enforcement findings.
By Julianne Geiger for Oilprice.com
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