Another CFTC Energy Market Manipulation Charge – Marathon Oil Agrees to Pay $1 Million

Michael Giberson

Tom Fowler, at the Houston Chronicle‘s NewsWatch: Energy blog, reports on the latest CFTC energy market manipulation case:

The alleged manipulation occured during the so-called “Platts window,” a 30 minute interval at the end of the trading day when the energy publishing firm Platts pulls data used to set prices for other foreign and domestic crudes. CFTC said Marathon tried to sell oil below market prices during the window in order to get a lower price set for oil it intended to purchase.

Marathon Oil agreed to a settlement under which it will pay a $1 million civil monetary penalty without admitting or denying guilt. The CFTC has issued a press release on the settlement.

Fowler said, “Given the new level of coordination between the CFTC and the Federal Energy Regulatory Commission, I wonder if we should be seeing a similar settlement with FERC in the near future?”

When I last looked, FERC didn’t have the same legal authority over crude oil markets as it does for gas and electric power markets. However, the case against Amaranth hangs largely on the assertion that Amaranth’s trades in natural gas futures markets directly influenced prices paid on FERC-jurisdictional contracts, since many such contracts have prices linked to the NYMEX price. So maybe, out there somewhere, there is a FERC-jurisdictional contract indexed to Platt’s oil price report. If such a contract exists, then FERC may be on the case next

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