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 (â‚¬7m) of losses for his company.
PVM Oil Associates, the worldâ€™s largest over-the-counter oil brokerage, said on Thursday it had been the â€œvictim 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…..
The involvement of PVM is ironic considering the companyâ€™s head, David Hufton, has been an outspoken critic of speculators in the oil market, calling some of the exchanges â€œelectronic oil casinosâ€. In 2006, he said that â€œif 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.