US federal regulators are examining whether companies are manipulating
crude oil prices by engaging in a flurry of after-hours trading pushing the
prices higher or lower on a widely used reporting system, The Wall Street
Journal reported yesterday.
The move comes amid growing regulatory scrutiny of energy markets due in part
to rising prices.
But it is unclear whether the activity in question would have affected the
price consumers pay for oil and products like gasoline. In some cases,
manipulations can push a price down, said the report.
In the first indication of pending enforcement action, Marathon Oil Corp.
disclosed this week that the Commodity Futures Trading Commission (CFTC) is
recommending an enforcement action against one of its units, according to the
report.
The action concerns an alleged attempt to manipulate the price of West Texas
Intermediate crude oil through bidding activity in what is known as the cash
market for physical shipments of oil.
According to a quarterly report Marathon filed Monday with the Securities and
Exchange Commission, the CFTC alleged Marathon Petroleum Co. LLC "offered to
sell crude oil in a physical cash market at a price lower than contemporaneous
bids" on a single day several years ago, Nov 26, 2003.
