Platts lifts limits on Goldman oil trade - sources
SINGAPORE, Oct 29 (Reuters) - Energy pricing agency Platts has lifted its review on Goldman Sachs (GS.N) that had prevented Wall Street's biggest oil trader from making a market in benchmark prices, sources familiar with the move said on Wednesday.
Goldman was placed under review just over two weeks ago, making it the last in a series of major banks to be restricted from trading in a key half-hour price assessment window as Platts stepped up its monitoring of counterparty credit risk.
"The review has been completed and they are allowed to trade again without any restrictions," said a source who was briefed on the matter, who didn't want to be named because he was not authorised to comment officially.
"The original concern seems to have been deemed to be unfounded," the source added.
Two further sources confirmed the review had been lifted and Goldman's trading arm J Aron was free to make markets again, allowing them to place bids and offers in the trading window that Platts uses to help establish the price for hundreds of opaque, over-the-counter physical oil and energy products every day.
The restrictions on Goldman came at a time when the global credit crisis and financial market turmoil is constricting trade across commodity markets and heightening credit anxiety among traders as once blue-chip financial institutions founder.
While Platts does not have the resources or the remit to assess a company's credit status, its officials have said it must sometimes limit the activities of some companies in the window when faced with issues -- including credit concerns raised by other participants -- that threaten to skew its prices.
Goldman's review had not been as severe as those placed earlier on some rivals, who were effectively barred from participating in the half-hour window.
Even under the review Goldman's trading arm J Aron had been able to trade during the window -- and Platts took those trades into account -- but it was not able to submit bids and offers to make a market during the assessment.
Traders have said, however, that Goldman stayed absent from the window during the review.
Goldman Sachs corporate communications and a Platts spokesman in Singapore declined official comment. Platts, a unit of McGraw-Hill (MHP.N), declines to confirm or deny any specific reviews of companies taking part in its assessment process.
It is not uncommon to be under Platts review for things such as violating the rules of trade or delivering off-specification product, essentially a punitive measure with different levels of severity, the toughest of which is known as "boxing".
But until recently, Platts, which competes with Thomson Reuters in providing news and information to the energy markets, was less likely to start a review because of credit concerns.
It placed Lehman Brothers, which had a much smaller energy trading operation, under review in July, about two months before the bank collapsed.
It was not immediately clear whether a review on rival Morgan Stanley (MS.N), imposed in September, had been lifted. [ID:nSP254210]
For an analysis on Platts' role in physical energy markets dated July 9, click on [ID:nSP16055]
For a factbox on investment banks in energy and commodities markets, click on [ID:nL3307380] (Reporting by Annika Breidthardt; Additional reporting by Jonathan Leff and by Luke Pachymuthu in DUBAI; Editing by Michael Urquhart)
