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Globe and Mail - Amaranth Advisors LLC and two of its former traders have reached a settlement with U.S. regulatory staff over the alleged manipulation of natural gas futures prices.
The deal, which was submitted to the U.S. Federal Energy Regulatory Commission, could end the long case against hedge fund traders Brian Hunter and Matthew Donohue.
A spokesman for Mr. Hunter, a Calgarian who made more than $100-million trading natural gas for Amaranth before the hedge fund collapsed, declined to comment.
The commission accused the traders last year of manipulating prices on the New York Mercantile Exchange, and proposed a $291-million (U.S.) fine.
A spokesman for Mr. Hunter, a Calgarian who made more than $100-million trading natural gas for Amaranth before the hedge fund collapsed, declined to comment.
The commission accused the traders last year of manipulating prices on the New York Mercantile Exchange, and proposed a $291-million (U.S.) fine.
Bloomberg - Gold fell for the fourth straight session after the U.S. agreed to spend $250 billion to rescue ailing banks. Silver climbed.
Stocks in Europe and Asia rose for a second day after Treasury Secretary Henry Paulson announced plans to buy stakes in financial firms to ease the lending crisis. Gold fell 1.9 percent yesterday as the Standard & Poor’s 500 Index soared 12 percent.
“The equity markets have come back, so you’ll see some of the capital that was flowing into gold just a week ago go to equities,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago.
Gold futures for December delivery dropped $3, or 0.4 percent, to $839.50 an ounce on the Comex division of the New York Mercantile Exchange. The price declined $64 in the previous three sessions.
BusinessWeek - Platinum and palladium prices rose Thursday alongside gold prices, though the gains were dampened somewhat by falling oil prices and a stronger dollar.
Precious metals are often bought to hedge against a weakening dollar.
Platinum futures for October delivery rose $43.50 to settle at $1,484.20 an ounce on the New York Mercantile Exchange.
Palladium futures for December delivery rose $6.50 to settle at $296.10 an ounce.
A note from a UBS analyst encouraging investors to buy gold boosted precious metals.
Los Angeles Times - Regulators had long classified a private Swiss energy conglomerate called Vitol as a trader that primarily helped industrial firms that needed oil to run their businesses.
But when the Commodity Futures Trading Commission examined Vitol’s books last month, it found that the firm was in fact more of a speculator, holding oil contracts as a profit-making investment rather than a means of lining up the actual delivery of fuel. Even more surprising was the massive size of Vitol’s portfolio — at one point in July, the firm held 11% of all the oil contracts on the regulated New York Mercantile Exchange.
The discovery revealed how an individual financial player had gained enormous sway over the oil market without the knowledge of regulators. Other CFTC data showed that a significant amount of trading activity was concentrated in the hands of just a few speculators.
The CFTC, which learned about the nature of Vitol’s activities only after making an unusual request for data from the firm, now reports that financial firms speculating for their clients or for themselves account for about 81% of the oil contracts on the Nymex.
Bloomberg- Hedge-fund managers and speculators reduced bets on higher oil prices by 80 percent since July as crude futures rose to records and U.S. regulators started investigating trading, government data show.
So-called speculative net long positions fell to 25,867 contracts on the New York Mercantile Exchange in the week ended May 27 from a record 127,491 on July 31, according to a U.S. Commodity Futures Trading Commission report on May 30.
The decline may complicate the CFTC’s probe as regulators try to determine how much of the rise in oil to more than $135 a barrel last month was caused by speculators who may have manipulated the market instead of consumer demand.