An oil cartel? No never...

[Jan Klimkowski]

What passes for Breaking News in the C21st MSM world....

BP and Shell raided in oil price-rigging investigation

European commission carries out 'unannounced inspections' to investigate claims oil companies colluded to manipulate prices

Rupert Neate and Terry Macalister
guardian.co.uk, Tuesday 14 May 2013 19.29 BST

The suspected violations related to the Platts' price assessment process may have been going on since 2002.

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.

The European commission said its officers carried out "unannounced inspections" at several oil companies in London, the Netherlands and Norway to investigate claims they may have "colluded in reporting distorted prices to a price reporting agency (PRA) to manipulate the published prices for a number of oil and biofuel products".

The commission said the alleged price collusion, which may have been going on since 2002, could have had a "huge impact" on the price of petrol at the pumps "potentially harming final consumers".

Lord Oakeshott, former Liberal Democrat Treasury spokesman, said the alleged rigging of oil prices was "as serious as rigging Libor" which led to banks being fined hundreds of millions of pounds.

He demanded to know why the UK authorities had not taken action earlier and said he would ask questions of the British regulator in Parliament. "Why have we had to wait for Brussels to find out if British oil giants are ripping off British consumers?" he said. "The price of energy ripples right through our economy and really matters to every business and families."

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.

The European authorities declined to name any of the companies raided but BP, Shell, Norway's Statoil and Platts, the world's leading oil price reporting agency, all confirmed that they are being investigated.

In a statement Shell said: "We can confirm that Shell companies are currently assisting the European commission in an inquiry into trading activities."

BP said: "BP is one of the companies that is subject to an investigation that was announced by the European commission. We are co-operating fully with the investigation and unable to comment further at this time."

Statoil, which is 67%-owned by the Norwegian government, said: "The authorities suspect participation by several companies, including Statoil, in anti-competitive agreements and/or concerted practices contrary to Article 53 of the European Economic Area (EEA) [market manipulation].

"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".

The commission also said the big oil companies may have "prevented others from participating in the price assessment process, with a view to distorting published prices.

"Any such behaviour, if established, may amount to violations of European antitrust rules that prohibit cartels and restrictive business practices and abuses of a dominant market position.

It warned that: "Even small distortions of assessed prices may have a huge impact on the prices of crude oil, refined oil products and biofuels purchases and sales, potentially harming final consumers."

Luke Bosdet of the AA said British drivers would be relieved that the "lid is finally being lifted off the dark and murky world of oil pricing".

"Because prices are set in secret drivers and consumers have no idea whether or not the price they pay at the pumps is a fair reflection of the wholesale price," he said.

The raids come six months after the Guardian revealed claims of a gas trading scam that led to investigations by energy regulator, Ofgem, and the Financial Services Authority (now the Financial Conduct Authority) which is still ongoing.

The probe by Brussels also comes at a time when the price reporting agencies are themselves under wider scrutiny and have been told by Iosco, the umbrella group of financial regulators, to tighten up the way they work.

There has been deep unease since the Libor scandal that traded commodities such as oil and gas have become increasingly important as investments and yet many of the transactions are not going through exchanges where prices can be checked and transparency for investors assured.

Mounting concern that energy trading had become an area of potential market abuse was highlighted in a feature in the FT last week. This triggered a response from Platts, the PRA at the centre of the new EU probe.

In a letter to the FT this week Larry Neal, the president of Platts said: "Your comparison of PRA activity to Libor is a false one … While PRAs do obtain information from 'traders who may have a vested interest in moving the markets', the agencies do not have any such vested interest. In contrast, our role is providing market transparency."

Last week the Guardian reported that some major energy companies, plus banks and trading houses have stopped providing information to the PRAs whose indices have underpinned the wholesale and in turn the retail gas market.

Officials at Statoil, were among those who said that they had ceased co-operating with three PRAs Platts, Argus and Icis Heren.

Before Christmas the French oil group Total said in a letter to Iosco: "Sometimes the criteria imposed by PRAs do not assure an accurate representation of the market and consequently deform the real price levels paid at every level of the price chain, including by the consumer."

[David Guyatt]

What I find curious here is that only the two British majors, Shell & BP (but also plus Statoil and Platts) are named?

Why name those companies but not the others? In terms of collusion to fix the price of oil, an investigation would have to march to Moscow and Texas - plus all points in between.

[Magda Hassan]

CAMERON & THE MANIPULATORS: Why a whore never turns on his pimps.

Last night, UK Prime Minister David Cameron "threatened" to prosecute the four oil giants who stand accused (along with intermediary price reporter Platts) of manipulating the oil price for their own advantage if they're found guilty. Why is he only threatening to do so? And why did he only threaten to do so after the EC had already caught them at it?
Let me give you a simple answer to each question. Cameron can only threaten, because energy providers like bankers are more equal before the law than the rest of us. And he has only made the threat after the EC went ahead with their raids because there is no way any British government would risk evoking the ire of these criminal sociopaths. Mr Cameron, and most politicians at his level, are nothing more than ordures on the shoes of oilmen.
Consider where the trail leads on this oily little racket. Platts is a wholly owned subsidiary of McGraw Hill. McGraw Hill also owns, um, Standard & Poors. S&P has within its gift the ability to say Britain is doing well (gilt yields fall) or Britain is heading down the sh*tter (gilt yields rise → Britain goes bankrupt → D Cameron out of a job). Stand by for an intervention from Boris Johnson along the lines of this being a deliberate EC plot to destroy Old Blighty by increasing its borrowing costs.
Let me also suggest another fix-scam to which Dave will give the very widest berth possible: ICAP. Bloomberg revealed three weeks ago that US regulators are investigating the ICAP interest-rate swap desk…..as part of a price-manipulation probe. Well blow me: another bunch of cheats under the cosh. According to the men in Bloomers, ICAP paid its brokers as much as $7 million a year at the market's peak earning the group the nickname "Treasure Island". ICAP is supposed to be an onscreen record book for swap dealers. It is supposed to be beyond reproach. But ICAP brokers in London passed on requests from dealers asking Libor-setters at rival banks to make favourable submissions, e-mails released as part of the European probe show. UBS AG, Royal Bank of Scotland Group Plc and Barclays Plc (BARC) have since paid $2.6 billion in fines for rigging Libor rates.
Now, here's a key fact to hold onto: London-based ICAP, the biggest broker of interest-rate swaps between banks, is run by Michael Spencer. Spencer is a former Conservative Party treasurer. He is also close to Michael Fallon, a member of the Cameron Cabinet and key man on the Treasury Select Committee that grilled Bob Diamond a few months back. At the time of the Libor scandal, Fallon was…..oh dear, a Libor broker. In the same reshuffle that promoted the appallingly ghastly incompetent Jeremy Hunt, Fallon too was promoted to the post of Minister for Business and Enterprise in September 2012. One of Fallon's first acts as Minister was to give an unpleasant speech rubbishing LibDem business minister Vince Cable….the first man to nail Murdoch's little game, and a man at least brave enough to call Fallon's flock "spivs".
So that's why David Cameron isn't going to prosecute ICAP troughers…..or Libor troughers…..or oilco troughers, or indeed any of the pigs swilling about in the trough. You see, David Cameron is their bumboy fag. He is their creature: they give him a yard of it up the backside 24/7. They insist on Hunt being promoted, on Boris's brother invading Number Ten, on Boris being allowed to make Rupert Murdoch his guest of honour at the Olympic Games without even the hint of a reprimand from Britain's Prime Minister, on Fallon getting a key job when he shouldn't even be on the TSC in the first place, on Andy Coulson becoming Cameron's communications director, on Hunt guiding the BSkyB bid, and (if they feel like it) on the Barclay twins' son Aidan telling the Leveson Committee members to go f*ck themselves.
These people can order the police to stop investigations into paedophile networks, threaten exposure of marital infidelity by Labour MPs investigating hitech corruption, and get senior cops fired off City probes getting too close to them. These people control David Cameron, and George Osborne. They use blackmail, falsified evidence, high-profile clubs, CCTV footage and bribes to ensure that secrets remain secret, certain MPs abstain, other MPs introduce embarrassing Bills, and Party donation irregularities remain private…..until this country's internal and external political options are honed to suit their selfish agendas.
The entire Camerlot cabal is surrounded by media, judicial, sexual, banking, security, bureaucratic and geopolitical interests which, from Day One, have been determined to see it fail. I hold no brief for that clique of public-school twerps and lest there be any doubt let me make it clear that their tormentors would in turn swat the Ed Miller Band as if it might be a badly disabled fly….should the electorate conspire to vote them into power. But it's time the British wised up. Kenneth More is dead, television is crap, commercial ethics have disappeared, One Nation Toryism has gone forever, the senior ranks of the police are bent, most MPs are greedy chancers, Labour is peopled by clueless fluffies, any old crook is allowed to own a newspaper, and those in charge would rather take the money of sadists than protect their citizens' children.
This is not a financial, economic, social or political issue, it is a cultural slump. The Prime Minister and all those who would like his job are products of that diluted, sick, mefirst culture. It won't stop being like this until they've all been kicked out and our citizen vows have been renewed by enough leaders to make a real difference.
David Cameron prosecute an oil company? Don't make me laugh.
http://hat4uk.wordpress.com/2013/05/16/c...his-pimps/

[Peter Lemkin]

The big joke is that while they sometimes make 'quiet' deals to 'influence' price and availability or 'apparent availability ; more usually they hold widely announced meetings with their peer oil companies to fix prices and availability...so what is the surprise; it always; it is a conspiracy and cartel-like activity whether done on the hush-hush or at big media circus events.