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PRICE MANIPULATION ARTICLES

Abengoa is the latest name to emerge in the probe that started in May with raids on the offices of energy news and price publisher Platts, Statoil ASA, BP Plc, Royal Dutch Shell Plc and Argos Energies to gather evidence of possible collusion in oil and biofuel pricing.

Abengoa Bioethanol Arm Raided in EU Manipulation Probe

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Abengoa SA (ABG), owner of continental Europe’s biggest bioethanol plant, said that it’s being investigated as part of the European Union’s antitrust probe into possible manipulation of oil and biofuel prices.

The company and its Rotterdam-based Abengoa Bioenergy Trading Europe unit were inspected over possible collusion to manipulate the Platts market-on-close process and exclude companies from the way prices are assessed, Abengoa said in a U.S. regulatory filing dated Oct. 4.

Abengoa is the latest name to emerge in the probe that started in May with raids on the offices of energy news and price publisher Platts, Statoil ASA (STL), BP Plc (BP/), Royal Dutch Shell Plc (RDSA) and Argos Energies to gather evidence of possible collusion in oil and biofuel pricing. Pannonia Ethanol, a Hungarian ethanol producer, complained to the European Union’s antitrust arm last year, saying Platts denied it the opportunity to contribute to the price assessments.

“We are actively cooperating with the European Commission in its investigation” and all units “have at all times complied with the applicable competition laws,” Abengoa said in the filing.

The “suspected anticompetitive conduct, agreements and/or mutually coordinated concrete actions have allegedly existed since 2002 and would likely involve various markets for which the Platts MOC process is used to report prices, including markets for biofuels,” Abengoa said.

Instant Messages

Platts has assessed prices for crude oil, petroleum products and related swaps using its market on close process since 2002 in Europe. Traders voluntarily report bids, offers and trades to Platts through e-mails, instant messages and phone conversations in a defined window period each day, which are then used to create end-of-day price assessments for various commodities, including crude oil and ethanol.

Abengoa said in a separate statement today it would raise about 400 million euros from a share sale. The Seville, Spain-based company aims to repay about 323 million euros due this year and next year. The shares slipped as much as 5 percent and fell 2.4 percent at 3:56 p.m. in Madrid trading.

EU regulators said in May that even small distortions of prices used as benchmarks for commodities and derivatives may have a huge impact on the prices of crude oil, refined oil products and biofuels purchases and sales that may have been passed on to final customers. It said there is no deadline for its investigation.

Platts Checks

Platts, a unit of New York-based McGraw Hill Financial Inc., and the oil companies raided have all said they’re cooperating with the EU probe.

Antoine Colombani, a spokesman for the Brussels-based antitrust watchdog, declined to comment on the involvement of Abengoa.

Bloomberg LP, the parent of Bloomberg News, competes with Platts and other companies in providing energy markets news and information.

To contact the reporter on this story: Aoife White in Brussels at [email protected]

To contact the editor responsible for this story: Anthony Aarons at [email protected]

SOURCE

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Commodity Prices Wrong as Often as 27 Percent of Time for Traders

Wednesday, 09 Oct 2013 01:18 PM

Crude benchmarks were the least representative in markets where more than five respondents gave answers, followed by oil products, metals and iron ore.

Probes Spread

Regulators say they aren’t convinced of the integrity of commodity assessments. The EU’s probes will probably spread to raw materials, Almunia, a vice-president of the European Commission, said on the EU assembly’s website May 28.

“We have started with the financial sector, now we are in the energy sector, and probably in the raw materials or in other cases we will need to pay attention also,” he said.

Almunia’s comments came after antitrust authorities opened a probe into manipulation of oil prices. EU investigators searched the offices of Platts, the unit of New York-based McGraw Hill Financial Inc. that assesses the price of Dated Brent, the benchmark for more than half of the world’s crude. Authorities also raided BP Plc, Royal Dutch Shell Plc and Statoil ASA, and sought information from Vitol Group, Gunvor Group Ltd. and Glencore Xstrata Plc.

Spokesmen for BP, Shell, Statoil, Gunvor and Glencore declined to comment, as did a spokeswoman for Vitol.

The Federal Trade Commission is investigating oil prices, mirroring Europe’s inquiry, two people familiar with the matter said in June. The FTC is looking at the impact that possible manipulation of the benchmark could have on physical and derivative oil markets in the U.S., a person who asked not to be named because the matter is confidential said in July.

COMPLETE ARTICLE

Commodity traders cast doubt on benchmark prices

by Lananh Nguyen and Isaac Arnsdorf, October 10 2013, 05:44

EXTRACTS

COMMODITIES traders who buy and sell as much as $5.67-trillion of raw materials a year say the benchmark prices for everything from oil to iron ore are wrong as often as 27% of the time.

In a Bloomberg News survey conducted during the past eight weeks, 85 traders and analysts said they have little confidence in the assessed prices of crude, metals and iron ore. Regulators, including European Union (EU) Competition commissioner Joaquin Almunia, may examine commodities markets, having already increased investigations into manipulation of benchmarks for interest rates, derivatives, foreign exchange and oil.

The system of price benchmarks in the oil market “isn’t broken”, Ian Taylor, president and CE of Vitol Group, the world’s largest independent oil trader, said at the Oil and Money conference in London last Tuesday. Some prices are hard to assess because there are not enough trades, he said.

FULL ARTICLE

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