Traders accused biggest oil companies of manipulating prices

Four independent traders have accused biggest oil companies, including BP Plc, Statoil ASA and Royal Dutch Shell Plc, of conspiracy with Morgan Stanley and Vitol Group oil trader with the purpose of manipulation of Brent oil prices, which is a model for the majority of the contracts for delivery of oil and some other energy carriers, reported Bloomberg agency.

In their suit the traders, including Kevin McDonnell, former Director of the New York Mercantile Exchange (NYMEX), individual traders Anthony Insinga, Robert Michiels and John Devivo, have described that over 10 years the companies managed the oil prices in their own interests. They also described their attempts to manipulate Russian Urals oil prices and cited an example of falsification of a straddle between the cost of Brent and Dubai brends.

In particular, the plaintiffs claimed that the oil companies have provided wrong information to Platts agency, which is the basis for many stock exchanges and separate investors. Another way to manipulate was the so-called spoofing, which is placement of  big orders, which are able to affect the dynamics of the market for their further annulation.

“This is a very secret market. It can be impenetrable for the stangers. The specialists and traders could take advantage of this uncertainty,” said David Kovel, lawyer of the traders. 

These are not the first accusations of oil giants of manipulation. In May 2013 the European Commission (EC) checked the companies in fields of crude oil, oil products and bio fuel, such as BP, Royal Dutch Shell and Statoil and Platts Agency. EC suspected that the companies have entered into a conspiracy to distort information about oil prices and also prevented other firms from being involved in evaluation of the cost of products, reported Prime.—0—