FTC offers rules to fight oil market manipulation

WASHINGTON (Reuters) - The Federal Trade Commission proposed U.S. government rules on Wednesday to fight manipulation in the oil market, where prices hit a record $147 a barrel last month.

The commission, under pressure to investigate possible manipulation of gasoline and other fuel prices, said its rules would bar any fraud or deceit in the purchase or sale of crude oil, gasoline or other petroleum product.

"This is new authority for the Federal Trade Commission. The CFTC has the authority to police the futures and the physical market," said Patricia Galvan, an FTC deputy assistant director, referring to the Commodity Futures Trading Commission.

The agency said in a statement that: "Fraudulent or deceptive acts, including false reporting to private reporting services or misleading announcements by refineries, pipelines or investment banks, may be covered by the proposed rule."

"Similarly, trading practices in physical or futures markets may also be covered," the FTC said.

Galvan said that some of the proposed rules arose from concerns in the industry. "There has been false reporting to private data reporting services, at least allegations of that," she said.

Those who violate the rule would be subject to civil penalties of up to $1 million per violation per day, the commission said.

The proposed rules will be published in the Federal Register of new government regulations on August 19 and will be open to public comment until September 18.

(Reporting by Diane Bartz; editing by Jeffrey Benkoe and Gerald E. McCormick)