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BP’s under investigation — again

Stephen Beard Dec 14, 2006


STEPHEN BEARD: BP is facing claims that it manipulated unleaded gasoline futures on one day — four years ago. In Chicago, BP spokesman Scott Dean denies the charge.

SCOTT DEAN: We are confident that manipulation did not occur, was not attempted, and that no laws were broken by our people. The free market’s forces of supply and demand were at work that day.

This latest lawsuit by the futures regulator reflects a more general concern in Congress. Some lawmakers are worried that Big Oil is routinely manipulating energy markets. But Carola Hoyos of the Financial Times does not believe there is a major problem.

CAROLA HOYOS: Anytime the oil price is high, or the electricity price is high, or the gas price is high, Congress worries about these things. And so I’m a little cynical about this — I think there’s a really good dash of politics involved here.

Nevertheless, the regulator clearly believes it has some evidence of wrongdoing. There are no details yet of the unleaded gasoline case, but this summer the same regulator targeted BP for trying to corner the propane market. Exhibit A was a recorded phone conversation between BP traders.

TRADER: What we stand to gain is not just that we’d make money out of it, but we would know from thereafter that we could control the market at will.

BP fired seven employees over the propane case, but denies they were trying to manipulate the market.

In London, this is Stephen Beard for Marketplace.

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