WASHINGTON—A group of financial speculators made $50 million by manipulating the price of oil in 2008, the Commodity Futures Trading Commission (CFTC) charged on Tuesday.

The high-profile case underscores how high prices for oil and gasoline increasingly are believed to result significantly from financial speculation rather than solely from conventional market forces of supply and demand.

In a filing with the US District Court for the Southern District of New York, CFTC attorneys alleged that a group made up of oil speculators Parnon Energy Inc., Arcadia Petroleum Ltd. and Arcadia Energy (Suisse) S.A. unlawfully manipulated trading of oil on the New York Mercantile Exchange.

The civil charges are for alleged manipulation during the first four months of 2008, when crude oil was on its way up to the all-time high of $147 a barrel.

The CFTC complaint alleges that the three companies and two executives conspired during a period of relatively tight oil supplies to amass big quantities of oil for next-month physical delivery. They were dominating and controlling supply, even though they were not commercial users of oil.

The documents alleged that these traders in January 2008 held 66 percent of the 7-million barrels of oil they expected to be in storage at the end of February in Cushing, Oklahoma, where benchmark West Texas Intermediate (WTI) crude is delivered.

The companies allegedly held this large physical position on the final day of trading in the futures market for February delivery, an unusual move since they had no commercial need for the oil.

In holding this deliverable oil off the market, the companies sought to artificially inflate the price of oil futures contracts, sending the signal that supplies would remain tight.       

Meanwhile, these same companies made large bets in the futures market that the price of oil would plummet in ensuing months.

When they eventually sold their deliverable oil at a loss, that didn’t matter to them, because they had switched their bets and were now aggressively betting that oil prices would drop in the futures market, the CFTC alleged.

“The scheme artificially increased the price of crude oil physical, derivatives and other oil products in the United States and elsewhere,” the CFTC said in its charging document.