The EU oil probe, which extends to undisclosed crude- derived products and biofuels, underscores how pricing in some energy markets lacks the transparency of financial products such as stocks and U.S. corporate bonds. It also marks the third time global pricing benchmarks have drawn the regulators’ scrutiny in the past year following investigations into bank manipulation of the Libor, and ISDAFix, the benchmark for the $379 trillion swaps market.
Almunia, Europe’s top antitrust official, said May 28 if oil price manipulation did take place, it would have caused “huge” damage to consumers.
Last month, EU investigators searched the offices of Royal Dutch Shell Plc, Statoil ASA, BP Plc and Platts, and requested records from some of Europe’s biggest trading houses, including Vitol Group, Gunvor Group Ltd. and Glencore Xstrata Plc.
Platts’s Dated Brent crude assessment is based on the price of trades, bids and offers on four grades of North Sea crude and related contracts. Platts gathers information from traders through emails, phone calls, instant messages and Platts electronic system, called the eWindow. Then the company calculates the day’s price as of 4:30 p.m. London time.
That benchmark price affects the value of over-the-counter oil derivatives, Brent futures traded on the ICE Futures Europe Exchange in London, and cargoes of crude from Canada to Australia.
Platts also publishes thousands of daily assessments across multiple commodities, which are used to price gasoline, diesel, biofuels, natural gas, electricity and petrochemicals. The suspected violations are related to Platts price assessments for crude, refined products and biofuels, and may have been going on since 2002, Statoil said in a May 14 statement.
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