BP Plc, Royal Dutch Shell Plc (RDSA) and Statoil ASA (STL) are under scrutiny by the U.S. Federal Trade Commission as the agency probes whether they manipulated oil benchmarks published by Platts, according to a person familiar with the matter.
The FTC’s early-stage investigation into oil prices mirrors a review by the European Union, which raided the offices of the three companies and Platts in May, two people familiar with the probe said last month. Platts, the energy-news and data provider owned by McGraw Hill Financial Inc. (MHFI), publishes the Dated Brent benchmark that contributes to setting the price of more than half the world’s oil.
The FTC is looking at the impact possible manipulation of the benchmark could have on physical and derivative oil markets in the U.S., said the person, who asked not to be named because the matter is confidential. The agency is interviewing third parties to clarify how Platts establishes its benchmark prices. It’s not clear whether Platts is a subject of the investigation, the person said.
The opening of the oil-price probe in the U.S. is the latest in a growing number of simultaneous EU-U.S. inquiries into areas including the London Interbank Offered Rate, standard essential patents and Internet search manipulation, as well as merger reviews in the music and airline industries. The extent to which regulators in each jurisdiction can collaborate with one another depends on whether the companies under review sign waivers allowing data about them to be shared.
The FTC routinely monitors wholesale and retail gasoline prices in the U.S. to look for anticompetitive behavior. The agency also publishes a guide on its website to complying with Petroleum Market Manipulation Regulations.
The agency will probably issue civil investigative demands, which are similar to subpoenas, to oil companies, trading firms and pricing services as the investigation progresses, two people familiar with the matter said last month.
Peter Kaplan, a spokesman for the FTC, declined to comment on the investigation. Kathleen Tanzy, a spokeswoman for Platts, wasn’t immediately able to comment. Scott Dean, a Houston-based spokesman for BP, and Kayla Macke, a spokeswoman for Shell also in Houston, didn’t immediately respond to e-mails seeking comment. Ola Morten Aanestad, a spokesman for Statoil, didn’t immediately respond to an e-mail sent after normal business hours in Norway.
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 Libor, and ISDAFix, the benchmark for the $379 trillion swaps market.
Joaquin Almunia, Europe’s top antitrust official, said on May 28 that if oil price manipulation did take place, it would have caused “huge” damage to consumers.
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 e-mails, phone calls, instant messages and Platts’s 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.
Bloomberg LP, the parent of Bloomberg News, competes with Platts and other companies in providing energy markets news and information.
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