It sounds like a made-for-TV movie about shady business dealings in Texas. In fact, it was a genuine conversation recorded at BP's offices in Houston in 2003 between two traders discussing the outlook for the US propane market and it is helping to shape the rules that govern global energy futures markets.

“How does it feel taking on the whole market, man?” asked one trader.

“Whew! It's pretty big, man,” his colleague responded.

“Dude, you're the entire f****** propane market,” came the crackled reply.

The glimpse into the real-life world of manipulation in the global energy markets was caught on a tape released by America's Commodity Futures Trading Commission (CFTC). Now the regulator is introducing a package of measures to prevent “manipulation and fraud” in those markets and has said that it is working closely with Britain's Financial Services Authority.

While such scams may be relatively easy to pull off in a small and illiquid market such as propane, are they possible in crude oil - where $70 billion (£35.3 billion) worth of contracts are traded daily on only one exchange, Nymex, in New York? There are plenty who believe that they are.

“I have no doubt that people are actively manipulating the market for crude,” Pierre Terzian, director of Petrostrategies, an oil market consultancy in Paris, said. “We are living in a very dangerous time. The whole world is suffering because of a lack of transparency.”

While there is no doubt that there has been a huge increase in the level of speculative trading in oil in recent years, the CFTC is understood to be concentrating on several areas of potential abuse or manipulation. They include whether the operators of oil storage facilities, pipelines, cargo ships and terminals could issue false information about the supply of available oil and make trades to profit from the misunderstanding.

There are also questions over whether energy traders may abuse a commonly used price reporting system operated by Platts, the energy information provider, by inundating it with orders and possibly distorting prices.

Patrick Heren, an oil expert who has monitored the market closely since the 1980s, concedes that such practices probably do occur, but he remains sceptical about whether there is any significant impact on prices. “There is always likely to be game-playing around the edges and traders finding ways to slightly move the price by a few cents,” he said, “but I don't think, given the huge volumes and liquidity of today's market, that it is possible to do much more than this.

“I think we are talking about the difference between oil at $125 and $125.02 rather than oil at $50 or $125.”

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