Shane Ferro
The Wall Street Journal has a painstakingly detailed article on how oil prices are benchmarked, and how those benchmarks can be manipulated. The EU has been investigating major oil companies, as well as the industry publication that sets the daily benchmark price, since last month. If the probe turns up damning evidence, this could be the biggest price-fixing scandal since Libor.
What’s going on here?
In mid-May, EU investigators raided the offices of Shell, BP and Statoil, three of Europe’s largest oil exporters. They also hit Platts, which takes pricing data from oil traders and uses it to set a daily oil-price benchmark. The raids come on the heels of the Libor scandal, in which some of the world’s largest banks were fined for manipulating interest rate benchmarks.
