CFTC Investigating Crude Oil Market - TheStreet

CFTC Investigating Crude Oil Market

Recently, crude was up 78 cents at $127.40 a barrel.
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The Commodity Futures Trading Commission said Thursday that it started an investigation into the crude oil market in December in order to determine if prices have been manipulated.

The CFTC said its enforcement division launched the probe into practices surrounding the purchase, transportation, storage and trading of crude oil and related derivative contracts. Although the enforcement investigations are typically carried out confidentially, the CFTC said it was disclosing the review because of the "unprecedented market conditions" in the oil arena.

"In addition to the CFTC's ongoing examination of the role of fundamental economic forces and new investors in the recent commodity market price increases, the agency continues to pursue one of its primary missions -- to deter, detect, and punish futures market manipulation," the agency said in a statement on its Web site.

WTI crude traded for around $90 a barrel in early December, but since then, it has skyrocketed. Last week, it hit an all-time high above $135, though it has pulled back a bit in recent days. Recently, oil was up 78 cents at $127.40 a barrel.

Additionally, the CFTC said it has reached an agreement with the U.K. Financial Services Authority and ICE Futures Europe that will allow for expanded information-sharing for surveillance of energy commodity contracts with U.S. delivery points, including the West Texas intermediate crude oil futures contracts that trade on both the New York Mercantile Exchange and ICE Futures Europe in London.

The agency also plans to collect more information on trading, including developing a proposal to require more detailed information from index traders and swaps dealers in the futures markets.

"All Americans are significantly affected by high energy prices -- whether it's paying more at the pump, or higher costs for farmers and entrepreneurs," the CFTC said. "Today, the Commission is taking important steps to ensure that the U.S. energy futures markets function properly and operate free from manipulation and abuse. With these initiatives, we are improving our oversight capabilities and bringing greater sunshine to these markets."

Most stocks were lower in the premarket Friday.

Exxon Mobil

(XOM) - Get Report

was down 1% at $89.50,

Chevron

(CVX) - Get Report

was losing 1.5% to $98.94, and

Schlumberger

(SLB) - Get Report

was off 1.8% at $101.07.

The

United States Oil

(USO) - Get Report

exchange-traded fund was adding 1.3% to $103.61.

This article was written by a staff member of TheStreet.com.