RPT-UPDATE 1-Goldman faces limits in Platts oil window-sources

(Repeats to fix author's name)

By Luke Pachymuthu and Annika Breidthardt

DUBAI/SINGAPORE, Oct 13 (Reuters) - Goldman Sachs (GS.N), the biggest oil trader on Wall Street, has been restricted from making a market in price assessment agency Platts' daily oil trading window as counterparty anxiety grows, two sources familiar with the move said on Monday.

Goldman is the latest in a series of major investment banks to be placed under a so-called "review" by Platts, which has said it may sometimes need to limit the activities of some companies in its half-hour price-discovery process if their acceptability by counterparties threatens to distort benchmark prices.

However, the restrictions on its commodities trading arm J Aron are not as severe as those placed earlier on some rivals, who were effectively barred from participating in the window.

One of the sources, who was familiar with the order, said Goldman Sachs was still able to trade during the window and that its deals would be taken into account by Platts.

The agency uses bids, offers and trades to set the price for hundreds of opaque, over-the-counter (OTC) physical oil and energy products every day.

But Goldman will not be able to submit bids and offers to make a market during the assessment, said the source, who declined to be named. The second source said Goldman had been put under review by Platts, but did not give any details.

"Goldman's bids and offers will not be taken into account," the source said, speaking on condition of anonymity. "That limits their market making but their trades are not affected."

On Monday, Goldman did not participate in the half-hour Platts window that runs from 0800 GMT to 0830 GMT, traders said.

The review does not stop Goldman from trading oil, and there was no suggestion that the review had affected its day-to-day trade. But being restricted from making a market in the window will reduce the bank's influence on Platts' benchmark prices.

Goldman Sachs corporate communications and a Platts spokesman declined to comment. Platts has repeatedly declined to confirm or deny previous instances where it has placed a company under review.

"Platts does routinely, and as part of standard editorial practice, review the companies participating in its price assessment processes, with the objective of maintaining the integrity of its price assessments," Platts said in an email.

STEPPED-UP MONITORING

As the month-old financial crisis roils Wall Street, claiming once-mighty financial institutions in its wake, Platts, a unit of McGraw-Hill Companies Inc (MHP.N), has stepped up its monitoring of counterparty acceptance in the oil market.

It placed Lehman Brothers, which had a much smaller energy trading operation, under review in early July, about two months before the bank collapsed, and did the same for trading heavyweight Morgan Stanley (MS.N) a month ago.