The Commodity Futures Trading Commission has launched an investigation into short oil bets worth a total $7 billion, made in March and April right before statements by President Donald Trump that led to oil price drops, Reuters has reported, citing exchange data and unnamed trading sources.
Earlier reports pegged the suspiciously timed bets at a total of $2.6 billion, the publication added, noting that the news had prompted warnings by the U.S. administration to staff about using information that has not yet been made public for personal financial gain.
According to the latest report, the bets were placed across crude oil and fuel futures contracts on the Intercontinental Exchange and the Chicago Mercantile Exchange, including Brent crude, West Texas Intermediate, gasoline, and diesel.
An earlier report from April 22 said a suspicious short bet worth $430 million on crude oil futures had been placed the previous day, 15 minutes before President Trump announced the indefinite extension of a ceasefire agreed with Iran earlier in the month. The announcement led to a drop in Brent crude from over $100 to below $97 per barrel.
Reuters, for its part, reported this week that the first suspicious trade had taken place on March 23, minutes before the U.S. president announced he would delay missile strikes on Iranian power infrastructure, after threatening to obliterate it earlier. Then, on April 7, right before Trump announced the ceasefire with Tehran, another round of bets took place, before crude oil shed 15% following the announcement. A third instance of suspicious short bets on oil took place on April 17 before reports about negotiations between Washington and Tehran on reopening the Strait of Hormuz, and then came the April 21 round of bets prior to the ceasefire extension announcement.
“All federal employees are subject to government ethics guidelines that prohibit the use of non-public information for financial benefit,” a spokesperson for the White House said in response to the Reuters report.
By Irina Slav for Oilprice.com
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