Platts, the energy information provider owned by McGraw-Hill Cos., and Argus Media Ltd. said that some companies have stopped providing their reporters with the natural gas pricing data they use to compile its indexes.
“While there has been drop-off in data from some market principals, we have also gained a number of new sources and our ability to assess market value has not been hindered,” Kathleen Tanzy, director of communications at Platts in New York, said in an e-mailed statement. “Platts receives information from many market participants, including aggregators such as brokers.”
ICIS, a unit of Reed Elsevier Plc that competes with Platts and Argus, said last month that it may drop reporter-led surveys after some clients said they mistrust the company’s assessments. It will introduce closing-price natural gas indexes based on executed trades to run alongside some closing index evaluations in a testing phase for six months, it said following a consultation that ended March 15.
The Financial Times reported yesterday that energy companies including Statoil ASA, trading houses and banks have stopped submitting quotes to price-reporting agencies.
Some providers of pricing data have “disengaged from the market transparency process because of misplaced regulatory concerns, but other companies have come forward,” Simon Smith, head of government and regulatory affairs at Argus, said today in an e-mail. “Argus has seen no loss of market information in the European natural gas market.”
ICIS didn’t immediately respond to messages left with a public relations representative and marketing manager.
“The assessment process is robust and considers completed transactions, bids and offers,” Tanzy said. “Platts publishes an end-of-day, market-closing value. We are not at this time contemplating an all-day index.”
ICIS began its consultation in the wake of accusations last year by Seth Freedman, a former reporter with the company, that inadequate training of staff left the pricing mechanisms for the $1 trillion European gas market vulnerable to manipulation. ICIS said at the time its employees get “extensive training” that equips them to challenge the information they receive. ICIS reported in September what it described as irregular trades to regulators. Freedman notified the Financial Services Authority in October.
Among the public responses, Statoil said that the current methodology used by ICIS “allows for the potential use of incorrectly reported trades to be factored into the index calculations, which can result in inaccurate prices being published.”
Centrica Plc proposed using daily cleared natural gas auctions as more transparent and reliable than over-the-counter assessments. RWE AG said it doesn’t always have confidence in ICIS gas-price assessments.