Econintersect: A recent lawsuit by four floor traders alleges that world oil prices are manipulated by a small group of oil companies, a Wall Street investment bank and private trading firms. The rigging has been accomplished in the pricing of Brent crude which is produced in small quantities from the North Sea but is used as a global benchmark for pricing. According to an article by Bloomberg last week, oil companies involved were BP, Statoil and Royal Dutch Shell; from Wall Street, Morgan Stanley; and Vitol Group was one of the energy traders. According to Bloomberg this is only the latest of at least seven U.S. lawsuits with similar allegations.
The conspirators are alleged to have manipulated the prices of the thinly traded Brent benchmark with fictitious bids that were placed only to move the price in a direction favorable for trades by the participants in the scheme and then canceled before execution.
The following video is an interview of former oil trader Dan Dicker by Aaron Task and Lauren Lister at Yahoo!
Other complicit energy traders mentioned in the Wall Street article were Trafigura Bheer BV and Phibro Trading LLC. Phibro has roots going back to 1901 and was a subsidiary of Citigroup from 1998 to 2009 and has been a part of Occidental Petroleum since October 2009.
- Brent Crude Traders Claim Proof BFOE Boys Rigged Market (Bob Van Voris, Lananh Nguyen, Brad Olson and Elisa Martinuzzi, Bloomberg, 06 November 2013)
- Yes, Oil Prices Are Being Manipulated — But Not By Who You Think (Aaron Task, Yahoo Finance, 13 November 2013)
- Phibro (Wikipedia)