Commodities

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A London firm was hit with losses of £6m after a suspected rogue trader made a massive, unauthorised bet on the oil market.

The flurry of trading caused the kind of sudden jump in the oil price that would normally be attributed to a geopolitical event or pipeline attack.

Authorities have confirmed they are probing trading that took place in the early hours of Tuesday morning and sent the price of London Brent crude futures from US$71 a barrel to a 2009 high of US$73.5.

PVM Oil Futures issued a statement after rumours spread about irregular trading on City and Asian markets.

It said: "PVM can confirm that it was the victim of unauthorised trading on Tuesday 30th June.

"As a result of a series of unauthorised trades, substantial volumes of futures contracts were held by PVM.

"When this was discovered, the positions were closed in an orderly fashion. PVM suffered a loss totalling a little under 10 million dollars.

"PVM expects the highest standards of conduct from its people and takes contraventions of those standards extremely seriously."

The trades were placed on ICE Futures Europe, part of the Intercontinental Exchange, where traders can buy or sell crude oil for delivery in several months' time, effectively betting on whether prices will go up or down.

ICE Futures Europe's president David Peniket refused to comment on individual cases but said the body would investigate unusual trading activity as a "matter of course".