Watchdog in talks with UK on oil market rules

LONDON (Reuters) - The U.S. energy markets watchdog had discussions in London this week with its counterpart the Financial Services Authority about regulation of oil futures trading, a source close to the situation said on Wednesday.

Jacqueline Mesa, director of the U.S. Commodities and Futures Trading Commission, met with the FSA to discuss the possibility of introducing limits on traders' positions on the ICE Futures market.

ICE Futures Europe is owned by the InterContinentalExchange (ICE.N), which is based in Atlanta, but regulated by the FSA.

Traders can trade a version of U.S. crude oil futures on its electronic trading system.

Last month, the CFTC said the FSA and ICE Futures Europe had agreed to share more information on trading in energy commodity contracts with U.S. delivery points, including the West Texas Intermediate crude oil futures contract that trades on the New York Mercantile Exchange and the ICE.

U.S. politicians have blamed speculative activity on oil futures markets for contributing to the rise in oil prices to record levels of nearly $140 a barrel.

The FSA had no comment. (Reporting by Jane Merriman)