BP Accused Of Manipulating US Natural Gas Prices
From Channel NewsAsia
NEW YORK – A US energy regulator on Monday proposed to fine oil giant BP $28 million for allegedly manipulating the natural gas market in 2008.
The Federal Energy Regulatory Commission charged that a team of Texas-based traders for BP America undertook a number of trades in late 2008 that deliberately lost money as part of a “manipulative scheme” to fix prices and boost profits.
A FERC staff report said the scheme was revealed in a recorded phone call between two of the traders, which came after a senior BP official expressed concern at the propriety of the trades,
The FERC said the operation had sought to artificially maintain for nearly two months a large spread between prices at two southeast US locations that initially arose from market disruptions caused by a hurricane.
Doing so significantly increased the value of contracts held by the trading team, the report said, netting BP around $800,000 gains.
The taped phone conversation proved “sufficient to provide staff with an outline of the Texas team’s manipulative scheme,” the FERC report said.
In addition to the proposed $28 million penalty, BP would be required to disgorge $800,000 under the FERC action.
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