Traders accused of rigging oil prices
CAPE TOWN – Motorists may have been paying over the odds for petrol after traders allegedly manipulated oil prices the same way as interest rates, The Daily Mail has reported.
An official report for the G20 group of world leaders questioned the reliability of oil prices and warns that the market is wide open to manipulation, the report said.
The G20 report, published by the International Organisation of Securities Commissions (Iosco), warned that traders have opportunities to influence oil prices for their own profit.
The oil market relies on firms to submit accurate figures on a daily basis – just like the Libor interest rate, which Barclays bank was found to have rigged.
This means that traders can choose which trades to make public, creating an opportunity for a trader to “submit a partial picture to the trader’s advantage”.
However, the Iosco report has pointed out that this system relies on the training of journalists to make a judgement about what the oil price should be.
The wholesale price of oil is linked to the price at the pump by benchmarks retailers use to decide how much to pay for future supplies.
These rates, said the report, are calculated by private data-gathering companies based on submissions from firms which trade oil daily.
This could mean motorists have all along been ripped off by artificially high oil prices. In recent reports, US regulators warned that the Libor rate-rigging scandal was likely to spread to the oil market. – News24