Regulators probing oil supply data: report

Thu Sep 4, 2008 4:48am EDT

A motorist fills the gas tank of his car at a petrol station in Phnom Penh September 02, 2008. REUTERS/Chor Sokunthea

A motorist fills the gas tank of his car at a petrol station in Phnom Penh September 02, 2008.

Credit: Reuters/Chor Sokunthea

(Reuters) - Commodity market regulators are probing whether energy market players are injecting false crude oil supply data into the marketplace, the Wall Street Journal said.

Regulators are concerned that companies may be reporting inventory levels that benefit their own trading positions but may not be accurate, the paper said, citing people familiar with the probe.

Unexpected drops in oil inventories reported each Wednesday by the U.S. Energy Information Administration can spark price spikes on the main oil futures benchmark on the New York Mercantile Exchange.

The report noted a company could theoretically underreport barrels in its tanks to suggest oil is scarcer than it really is, and then sell its physical oil at a premium when oil prices jump on misleading news.

The regulators -- the Commodity Futures Trading Commission (CFTC) -- may have been tipped off on unexpected big market moves by sources in the oil trading world, the Journal said.

The CFTC is taking depositions, or testimony, about some of those periods, lawyers told the paper.

No-one at the CTFC was immediately available for comment.

(Reporting by Saumyadeb Chakrabarty in Bangalore; Editing by David Holmes)

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