Sir Bob Reid, chairman of ICE Futures Europe, appears before the Treasury Committee in Westminster tomorrow to address the question of whether speculators are driving up oil prices. He might reflect on the irony of his task in playing down the importance of ICE.

Back in 2001, he chaired London's IPE, the home of the Brent Crude futures market, when it agreed to a £47 million bid from Intercontinental Exchange (ICE), the upstart Atlanta-based derivatives market. The ICE strategy was to use its electronic platform and IPE's power in energy futures to challenge the dominance of Nymex, the home of the benchmark West Texas Intermediate (WTI) crude futures contract.

Since then, crude oil futures' trading has ballooned and some American politicians see a conspiracy of hedge fund managers and bankers driving up the oil price at the expense of their constituents.

Britain is seen as the source of the wickedness because two years ago ICE began to trade WTI futures in London outside the regulatory writ of America's Commodities and Futures Trading Commission (CFTC). Pandering to the senators, the CFTC ordered ICE to obey its rules, even though ICE Futures Europe is under the jurisdiction of Britain's Financial Services Authority.

Meanwhile, senators in Washington are tabling legislation to curb speculators - some want to ban futures trading altogether. In vain, ICE tries to explain that the price of real barrels of oil that end up as petrol is driven by supply and demand, not financial futures. In desperation, on Thursday ICE disclosed to a US congressional committee that ICE's WTI futures accounted for only 15 per cent of the worldwide WTI market.

“In fact, ICE's share of the WTI market has been steadily declining since prices began to rise in 2007,” it told the House Agriculture Committee.

It might be a canny way for ICE to get the politicians off its back, but it's an embarrassing admission. The strategy of stealing Nymex's WTI contract through global electronic trading has not been a glorious success.

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