Newspaper article International Herald Tribune

Raids in E.U. Oil Price Inquiry ; Investigators Examining Possibility of Collusion to Report Distorted Figures

Newspaper article International Herald Tribune

Raids in E.U. Oil Price Inquiry ; Investigators Examining Possibility of Collusion to Report Distorted Figures

Article excerpt

The European authorities are looking into whether the companies may have "colluded in reporting distorted prices" in an effort "to manipulate the published prices" of oil and biofuel products.

The European antitrust authorities raided the offices of several oil companies and an industry data provider on Tuesday as part of a broader inquiry by the European Commission into potential price manipulation.

In what the commission termed "unannounced inspections," investigators descended on some European offices of BP, Royal Dutch Shell and Platts, a division of the U.S. publisher McGraw-Hill that provides pricing data for the oil industry. The authorities are looking into whether the companies may have "colluded in reporting distorted prices" in an effort "to manipulate the published prices of a number of oil and biofuel products."

All of the companies said they were cooperating with the inquiry.

Shell said it was "assisting the European Commission in an enquiry into trading activities." A spokesman said that the company's offices in Rotterdam and London had been "visited."

Platts said that the commission had "undertaken a review" at its London offices. Investigators also visited BP's oil trading operations, which are on the lower floors of the same building in the Canary Wharf financial district. BP said in a statement that the company was "subject to an investigation."

Statoil, the Norwegian oil and natural gas company, said its offices in Stavanger, Norway, had been inspected by the authorities at the request of the European Commission on suspicion of anti- competitive behavior, Reuters reported. Statoil said the suspected violations were related to the Platts price assessment process and might have been going on since 2002.

Norway is not a member of the European Union but is part of the European Free Trade Association, a group that also includes the non- E.U. nations Iceland, Liechtenstein and Switzerland.

Regulators in Europe and the United States have long been worried about the system by which oil and natural gas prices are set, which can affect the prices consumers pay at the gasoline pump as well as costs for airline and trucking companies. The concerns reached a heightened pitch in 2008, when oil prices hit nominal record highs and then quickly plunged. Amid the volatility, lawmakers in the United States and elsewhere questioned whether the prices were being distorted.

The authorities, in part, are focused on the price-reporting system for oil and other petroleum products, which is dominated by a small group of companies like Platts. Such companies determine prices by polling traders and using other industry data. The benchmarks published by these companies are used to determine the prices that a wide range of industrial users and consumers pay for crude oil and refined products like gasoline and jet fuel. …

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