* Commission sends list of questions to market participants
* Seeks discrepancies between prices submitted to Platts and
(Adds list of requests for information from Commission)
By Dmitry Zhdannikov and Peg Mackey
LONDON, May 21 The European Commission is asking
oil traders across the continent to provide evidence of market
abuse to determine whether companies sought to manipulate prices
reported to leading price-setting agency Platts.
Authorities last week raided the London bureau of Platts
and the offices of oil majors Statoil, Royal
Dutch Shell and BP in the biggest cross-border
action since the probe into rigging of Libor benchmark interest
rates. A small niche trading house in the Netherlands is also
part of the probe.
At issue is whether there was collusion to distort prices of
crude, refined oil products and biofuels traded during the
Platts market-on-close (MOC) system - a daily half-hour "window"
in which it sets prices.
The Commission is seeking information from market
participants - including top trading houses Glencore and Vitol,
European major Eni and Finnish refiner Neste - that refer to the
2010-2013 period and must be answered by the end of May, said
two senior oil executives who requested anonymity.
"They are casting the net very wide with a set of reasonably
good questions to establish how the market works," said a senior
"The biggest risk in energy markets in general is if someone
is abusing its dominant position. I think this investigation
comes down precisely to this."
The opening letter says the Commission is trying to identify
whether one or more companies have been prevented from joining
Platts' MOC process.
The key question on the list, the sources say, is whether
there is any proof of major discrepancies between bids and
offers submitted to Platts and actual deals done in the market,
trading sources said.
"There is a lot of tension between different trading
companies, so this questionnaire could generate interesting
results," said the senior trading source.
Platts, a unit of McGraw-Hill, provides clients
with price benchmarks set by reporters for opaque energy
markets. Its assessments are used to close physical and
derivative deals worth billions in a $2.5 trillion market.
A summary of the Commission's request is as follows:
* Give a short description of your company
* How are your trading operations organised
* What are the most important activities of your business
and the countries in which you are active
* Does your company belong to a group of companies
* Are you a subscriber to Platts
* Has your company experienced a situation when Platts'
prices were not a true reflection of the market
* Has it ever happened that a company's bids/offers/trades
reported by a market player to Platts did not reflect the prices
it told you on the same day
* Are you part of Platts window and does your company have
records of all dealing in Platts' window from 2010-2013
* What proportion of your company's deals are done through
Platts and outside it
* Does your company have experience of interaction with
Platts with regard to acceptance of new players into the MOC
* Have you ever asked Platts to correct a published price
* Please make sure you mention which information constitutes
Authorities have sharpened scrutiny of financial benchmarks
around the world since slapping large fines on some of the
world's biggest banks for rigging interest rate benchmarks.
Over the past year many observers have noted the resemblance
between the Libor self-reported benchmark and the journalist
assessment-based methodology used to set most of the world's oil
prices, but the investigation is the first indication that EU
authorities are taking a harder look at the system.
"We still don't know what has triggered this enquiry," said
a senior oil executive. "It's generating a lot of internal work,
but we're putting things together and will respond."
Hungary's Pannonia Ethanol, a recent entrant to Europe's
market, was the first company to identify itself as having
complained to Brussels over access to the Platts window.
Platts says trading in the oil market has not been
significantly affected by the investigation.
Thomson Reuters, parent of Reuters news, competes
with Platts in providing news and information to the oil market.
(Editing by James Jukwey)