From FT:
The startling spike in oil prices to their highest level this year on Tuesday was caused by a rogue broker who placed a massive bet in the Brent oil market, triggering almost $10m (€7m) of losses for his company.
PVM Oil Associates, the world’s largest over-the-counter oil brokerage, said on Thursday it had been the “victim of unauthorised tradingâ€. The privately owned company said that as a result of the unauthorised trades it had been forced to close substantial volumes of futures contracts at a loss…..
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The involvement of PVM is ironic considering the company’s head, David Hufton, has been an outspoken critic of speculators in the oil market, calling some of the exchanges “electronic oil casinosâ€. In 2006, he said that “if futures exchanges did not exist, oil prices would be a lot lowerâ€.
The $10m loss is a heavy blow for PVM, which reported profits of just $5.6m in the year to July 2008, according to its accounts.
