NEW YORK - A U.S. investigation into this week's record one-day spike in crude oil futures is unlikely to intimidate energy traders or weigh on prices in the long term.
The U.S. Commodity Futures Trading Commission launched a probe into a $25 surge in front-month U.S. crude futures on Monday that dealers attributed to short covering ahead of the contract's expiration.
The Chicago Mercantile Exchange said on Wednesday the CFTC had subpoenaed several oil traders -- a move that comes after broader efforts by the regulator to crack down on oil price speculation amid widespread pressure from U.S. lawmakers.
Analysts said the increased regulatory scrutiny was unlikely to influence the direction of crude oil prices, which have zoomed between a record above $147 a barrel and a seven-month low near $90 a barrel since mid-July.
"The CFTC is always hovering over the market and this investigation not likely to have any effect on the price," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
Oil analysts said, however, that the increasing volatility in the crude oil market -- which has seen a series of huge up and down moves in recent weeks -- could cause some players to start to shy away.
"This is a market that is warning traders to stay away. There are red lights flashing and sirens," said Tim Evans, energy analyst for Citi Futures Perspective in New York. "But that is independent from regulatory scrutiny."
"Monday's big move has the effect of reminding people about the huge risks associated with this market, especially heading into expiry," said McGillian.
U.S. crude oil futures fell by nearly a dollar on Wednesday amid continued worries that high energy costs and a flagging U.S. economy could undermine fuel demand.
U.S. oil demand is running about 4 percent below last year, according to the latest government data.
At least one analyst said that Wednesday's losses could have been encouraged by the CFTC probe.
"The (news) may be weighing on the market, at least initially, because with all that is going on with the federal government, traders may feel they are being targeted," said Rob Kurzatkowski, analyst at Optionsxpress in Chicago.
The U.S. Commodity Futures Trading Commission launched a probe into a $25 surge in front-month U.S. crude futures on Monday that dealers attributed to short covering ahead of the contract's expiration.
The Chicago Mercantile Exchange said on Wednesday the CFTC had subpoenaed several oil traders -- a move that comes after broader efforts by the regulator to crack down on oil price speculation amid widespread pressure from U.S. lawmakers.
Analysts said the increased regulatory scrutiny was unlikely to influence the direction of crude oil prices, which have zoomed between a record above $147 a barrel and a seven-month low near $90 a barrel since mid-July.
"The CFTC is always hovering over the market and this investigation not likely to have any effect on the price," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
Oil analysts said, however, that the increasing volatility in the crude oil market -- which has seen a series of huge up and down moves in recent weeks -- could cause some players to start to shy away.
"This is a market that is warning traders to stay away. There are red lights flashing and sirens," said Tim Evans, energy analyst for Citi Futures Perspective in New York. "But that is independent from regulatory scrutiny."
"Monday's big move has the effect of reminding people about the huge risks associated with this market, especially heading into expiry," said McGillian.
U.S. crude oil futures fell by nearly a dollar on Wednesday amid continued worries that high energy costs and a flagging U.S. economy could undermine fuel demand.
U.S. oil demand is running about 4 percent below last year, according to the latest government data.
At least one analyst said that Wednesday's losses could have been encouraged by the CFTC probe.
"The (news) may be weighing on the market, at least initially, because with all that is going on with the federal government, traders may feel they are being targeted," said Rob Kurzatkowski, analyst at Optionsxpress in Chicago.
