A 'rogue' trader pushed oil prices to 2009 highs
Every few years, a banker acting on his own begins to make trades not authorized by his firm. He risks his company's assets in the hopes of making a killing and probably a huge bonus. These traders usually end up losing large sums and being fired then investigated by the local financial regulators.
Earlier this week, a single trader pushed the price of crude from $71 to $73.50 in one hour. The higher price was the top amount paid for oil this year. In an exclusive report, the Financial Times writes that PVM Oil Associates, the world's largest over-the-counter oil brokerage, said on Thursday it had been the "victim of unauthorised trading."
The news shows how little regulation can do in special cases when people act alone. The oil trades were almost certainly against PVM Oil company policy and may have even violated restrictions set by authorities. But, unless a regulator is willing to sit at the desk of every trader in the world, the chances for the odd, unexpected, unauthorized trade still exists.
In a work full of electronic monitoring and tight restrictions, one man can still make a difference.
Douglas A. McIntyre is an editor at 24/7 Wall St.