WEST PALM BEACH, FL (HEDGECO.NET) – The Commodities and Futures Trading Commission, [CFTC] has subpoenaed the trading records of some hedge funds, in connection with its new investigations into theskyrocketing of natural gas prices last December. The CFTC is the government regulatory agency for the Futures and Commodity Markets. This inquiry would determine why natural gas prices almostdoubled late last year, and the role if any that hedge funds may have played in the price spikes.
In a statement from CFTC, the agency admitted that it has launched such investigation. The inquiry would also review why prices for natural gas futures contracts dramatically increased in the Mercantile Exchange in New York late last year from US$4.86 per million BTU on Nov. 25 to US$7.22 per million BTU on Dec. 12. The investigation would also determine whether any price manipulations were at all involved.
No specific hedge fund company was mentioned, and CFTC statements refer to �market participants� instead of hedge funds, but the government regulator also refers to companies trading natural gas futures however, most of those trading significant quantities of natural gas futures contracts are also hedge fund companies.
Late last year, Orin Hatch, Chairman of the Senate Judiciary Committee raised a possibility of hearings into the natural gas spikes, according to Hatch, there is no justification for such increases in natural gas prices considering the fact that there are near record amount of natural gas in storage facilities, in addition to the fact that there are no drilling problems at hand. Sen. Pete Domenici, R-N.M., Chairman of the Senate Energy Committee, is leading the inquiry.
Paul Oranika
Editor-in-Chief
HedgeCo.net
Email: Editor@hedgeco.net
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