May 14, 2013

Oil price rigging: A header you'll never see in the US

But it IS one we're now seeing in the European Union, which is investigating Shell and (shock me) BP for that practice.

And, no, this isn't a one-off practice:
The London offices of BP and Shell have been raided by European regulators investigating allegations they have "colluded" to rig oil prices for more than a decade.
"More than a decade."

Meanwhile, a former Liberal Democrat leader in the UK wants to know why his own government, since both oil companies are from there, haven't done anything themselves. Indeed, David Cameron's Conservative dog/shat-on LDP tail coalition explicitly rejected such an idea recently:
Just four months ago the Office of Fair Trading (OFT) ruled out an investigation into petrol price fixing after finding "very limited evidence" that pump prices rise quickly when the wholesale price goes up but fall more slowly when it drops.

That said, it's not just British. Per the Guardian story, Norway's Statoil and Platts, the world's leading oil price reporting agency, say they're being investigated, too. If this has spread to Platts, it's really, really big. Having worked at a daily newspaper in the Permian Basin of Texas, I know just how big a deal Platts is.

And, here's why it's in the mix:
"The suspected violations are related to the Platts' Market-On-Close (MOC) price assessment process, used to report prices in particular for crude oil, refined oil products and biofuels, and may have been ongoing since 2002."

Platts said the investigators had "undertaken a review at its premises in London this morning in relation to the Platts price-assessment process".
So, were editors or other staffers at Platts providing insider trading info to the oil giants? Jiggling the books in some way? Shaking down oil companies? What?

Meanwhile, Platts is all huffy that this is being compared to the Libor interest rate-fixing investigation. The fact that it's that indignant means that EU regulators must have struck ... er ...


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