FSA to probe trading in oil

THE FINANCIAL Services Authority (FSA) is to quiz oil industry representatives, hedge fund managers and politicians on the issue of whether speculators impact on oil prices.<br /><br />The meeting, scheduled for 5 August, will address whether or not the City watchdog should impose limits on oil trades positions, as has recently been mooted by the US Commodity and Futures Trading Commission (CFTC).<br /><br />An FSA spokesman said the meeting was part of regular round-table talks with industry sector representatives, but it comes as a debate rages about the impact of hedge funds and investment banks on oil prices.<br /><br />Prime Minister Gordon Brown warned earlier this month of the dangers of volatility in the price of oil, with crude selling for $34 (&pound;20.60) a barrel in New York at one point in February and soaring above $72 last month.<br /><br />And CFTC chairman Gary Gensler said earlier this week that his agency should &ldquo;seriously consider&rdquo; setting limits on the positions speculators can take in the commodity markets.<br /><br />However, the FSA has maintained throughout the financial crisis that economic uncertainty, rather than speculation, is responsible for fluctuating oil prices.