June 29, 2009 / 9:12 PM / 10 years ago

Oklahoma AG charges BP with price manipulation

OKLAHOMA CITY, June 29 (Reuters) - Oklahoma’s Attorney General has sued BP Plc (BP.L), charging the British oil major artificially inflated U.S. gasoline prices by as much as 18 cents a gallon using tactics to manipulate prices of crude oil and gasoline.

BP employees “engaged in the unfair and deceptive practice of manipulating, and of attempting to manipulate, gasoline and crude oil prices in connection with the trading of energy futures on commodity trading markets,” according to the suit, filed in a state court June 23.

Attorney General Drew Edmondson also alleges in the suit that the manipulation took place from 2002 until present, through BP’s “acquiring and hoarding short-term supplies of gasoline and crude oil”.

A spokesman for BP, Scott Dean, said the company does not comment on ongoing lawsuits.

The suit alleges BP instituted a “delivery squeeze” by hoarding gasoline at the New York Harbor hub to drive up prices, through October and November 2002, and again in August 2003.

It also alleges that BP undertook a similar practice in September 2003 at a crucial crude oil pipeline hub located in Cushing, Oklahoma, driving up crude oil prices.

“By such control, BP was able to manipulate NYMEX futures trading markets,” the lawsuit states.

“Any such manipulation would cause crude oil and gasoline prices to rise and, because Cushing crude oil is a benchmark crude oil, have ripple effects throughout the oil industry.”

The Oklahoma AG’s office filed a similar lawsuit May 29 against BP, accusing the company of similar practices having driven up the price of liquefied propane gas in February 2004.

Separately on Monday, BP Plc’s (BP.L) U.S. subsidiary agreed to investigate causes of unauthorized pollution and improve air monitoring at its giant Texas City, Texas, refinery in a deal announced with Texas Attorney General Greg Abbott. [ID:nN29384367]

The Texas agreement continues BP’s strategy to negotiate settlements to lawsuits involving the Texas City refinery since a March 23, 2005, blast killed 15 workers and injured 180 others at the refinery. (Reporting by Ben Fenwick; Editing by David Gregorio)

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