Wondering why gas prices are so high in parts of the country (Chicago, we’re looking at you)? So is the Federal Trade Commission (FTC), which has launched an investigation into the pricing of crude oil and petroleum-derived products, according to a Bloomberg report.
The agency’s investigation comes on the heels of a similar European Union probe, which also includes the pricing of crude oil-derived products and biofuels. Earlier this year, EU authorities raided the offices of Royal Dutch Shell Plc, Statoil ASA and BP Plc, and also reportedly looked into the methods of Platts, a McGraw Hill-owned price publisher whose price assessments are often used as a benchmark in energy markets.
The Department of Justice’s antitrust division reportedly asked the FTC to handle the investigation, suggesting that any resulting charges would likely not be criminal, Bloomberg reports.
Past FTC investigations into oil prices have generally centered on market forces—such as problems at refineries or shifts in global demand—not the setting of benchmark prices, according to Reuters. But benchmarks have come under increased regulatory scrutiny in the past few years, notably when it was revealed that a group of British bankers had been manipulating the London Interbank Offered Rate (Libor)—the benchmark for global interest rates.
The Commodity Futures Trading Commission is separately looking into reports of “spoofing” in the West Texas Intermediate crude-oil market. “Spoofing” occurs when a trader makes a bogus bid and then cancels it before the trade is completed.
For more InsideCounsel coverage of the oil industry, see: