* FSA, UK Treasury meet 20-30 oil industry groups Aug. 5
* Agenda: "Are arrangements for UK markets appropriate?"
* Focus on "transparency and market efficiency"
By Christopher Johnson
LONDON, Aug 4 (Reuters) - Britain's financial watchdog and the UK Treasury will meet oil industry representatives on Wednesday in response to U.S. pressure for more regulation of commodities markets.
The UK Financial Services Authority (FSA) has said the meeting will involve oil producers, traders, banks and funds.
It will discuss market transparency and efficiency, according to the FSA invitation to oil market participants, a copy of which has been seen by Reuters.
Industry sources say they expect 20-30 organisations or companies to be represented at the meeting in the FSA building in Canary Wharf, London's new financial services zone.
The meeting comes as the U.S. regulator, the Commodity Futures Trading Commission (CFTC), holds hearings in Washington which are likely to result in tighter rules on derivatives trading and possibly new limits on positions held by investors.
Industry sources say the FSA and most UK market participants oppose tighter rules for markets, preferring instead to keep a lighter regulatory regime to encourage liquidity.
Both the Intercontinental Exchange (ICE) and the London Metal Exchange (LME), two of the world's largest commodity exchanges, have said they have no plans to change the way they regulate large positions on their UK-based markets.
But both the FSA and the oil trading community believe they need to be seen to be responding to the CFTC and its concerns, industry sources say.
The FSA invitation highlights the "significant attention focused on the oil markets and the way in which they operate" over the last two years.
VOLATILITY
Oil prices hit an all-time high of almost $150 per barrel in July 2008 before plunging to below $40 in December and then rebounding sharply in moves some economists and politicians blamed on the influence of outside speculators.
Benchmark U.S. light, sweet crude oil futures and North Sea Brent crude oil were both trading above $71 per barrel by 1500 GMT on Tuesday.
"A number of different stake-holders have voiced concerns about the observed price and volatility of oil and the extent to which financial markets have contributed to these trends. During this time both (the UK Treasury) and FSA have continued to keep the appropriateness of the current UK regime under review," the invitation said.
It noted that the CFTC had launched a series of public hearings "focusing on energy position limits".
"In the UK, we are interested in whether the current arrangements for UK markets remain appropriate. For example, in relation to transparency and market efficiency and, if not, how this might be improved."
The invitation concludes: "We are seeking comments from market participants in relation to exchange, OTC (over-the-counter) and physical markets."
One senior official in an organisation that will attend the meeting on Wednesday said the FSA was unlikely to propose tighter regulations or position limits but might discuss greater reporting obligations.
"The FSA is going to set out its agenda and will ask lots of questions," said the official, who declined to be identified.
The official said neither he nor the companies he knew would be at the meeting favoured tighter regulation.
"We have engaged in a conference call with a number of firms to make sure that we have a proper party line on this, but I think we are going to be more in listening mode." (Reporting by Christopher Johnson; editing by Peter Blackburn)