Royal Dutch Shell Plc  .com Rotating Header Image

Platts System Could Be ‘Prone’ to Collusion, EU Official Says

Screen Shot 2013-05-17 at 01.06.41Platts’s oil-price reporting system “could be prone to collusion or distortion,” according to the European Union official in charge of the benchmark probe that led to raids on the premises of BP Plc, Royal Dutch Shell Plc and Statoil ASA. The EU probe is still examining two areas of concern — abuse of dominance and unlawful collusion, Gauer said.

November 14, 2013

Platts’s oil-price reporting system “could be prone to collusion or distortion,” according to the European Union official in charge of the benchmark probe that led to raids on the premises of BP Plc (BP/), Royal Dutch Shell Plc (RDSA) and Statoil ASA. (STL)

“The mere set up could be prone to collusion or distortion because it doesn’t take much to basically have strange reporting” by companies that participate in the pricing system, Celine Gauer, director at the European Commission’s antitrust unit for the energy industry, said today at a conference in Brussels.

It takes at least a year to review all the documents garnered during and after raids in cases such as the oil probe if the commission plans to open a formal investigation, Gauer said in an interview. Reviewing documents can go faster if the EU decides not to open a formal probe, she said, emphasizing that her comments today were in a personal capacity.

The commission also raided the premises of Abengoa SA and Argos Energies in May looking for evidence in relation to the markets for crude oil, refined oil products and biofuels. Gauer’s comments come after four longtime traders in the global oil market said in a U.S. lawsuit that the prices for buying and selling crude are fixed.

The EU probe is still examining two areas of concern — abuse of dominance and unlawful collusion, Gauer said.

“None of the two avenues is closed yet because we are simply looking at the material” gathered during the investigation, she said.

Kathleen Tanzy, a Platts spokeswoman in New York, couldn’t be immediately reached to comment.

Offers, Bids

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.

“Very often you see that it is not that many transactions or bids and offers that are reported on a day-to-day basis,” Gauer said. “On the basis of these trades, Platts develops independently, or so it seems, its price benchmark.”

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: Gaspard Sebag in Brussels at [email protected]

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

SOURCE

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

0 Comments on “Platts System Could Be ‘Prone’ to Collusion, EU Official Says”

Leave a Comment

%d bloggers like this: