Oil-Market Rigging May Have Caused ‘Huge Damages,’ Almunia Says
By Stephanie Bodoni – May 28, 2013 6:03 AM ET
Suspected oil-price manipulation may have caused “huge damages,” the European Union’s antitrust chief said today, as he drew comparisons with EU investigations into rigging of bank rates including Libor.
The two sets of probes have the same goal of examining possible collusion to manipulate prices through a reporting system, EU Competition Commissioner Joaquin Almunia said in a speech in Brussels.
Royal Dutch Shell Plc (RDSA), BP Plc (BP/), Statoil ASA (STL) and Platts, the commodities price reporting company, earlier this month said they are being investigated after the European Commission, the EU’s antitrust authority, conducted raids at the companies’ offices to collect possible evidence of collusion.
“We are still in the first steps of the procedure,” Almunia said. “If de facto the manipulation is confirmed, indeed, huge damages for consumers and users would have been originated by this.”
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 London interbank offered rate, or Libor, and ISDAFix, the benchmark for the $379 trillion swaps market.
“To some extent this problem has similarities with the benchmarks in the financial sector and with the investigations we are carrying out on Libor, Euribor and Tibor cases,” Almunia said, referring to EU probes into those financial benchmarks.
“In these investigations — as in the Libor and Euribor cases — our goal is to make sure that the companies have not colluded to manipulate their prices through a reporting system,” he said.
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