OIL traders will face a probe from UK regulators over claims market prices are being manipulated to keep them artificially high, a government minister said yesterday.
In an echo of the Libor fixing scandal, energy minister John Hayes said he would write to the Financial Services Authority to raise concerns that traders and speculators were rigging the price of oil.
Hayes, who was appointed to minister in last week’s reshuffle, also said the Bank of England would widen its inquiry in the Libor rigging to include allegations that oil prices are similarly manipulated.
It follows calls in Parliament yesterday from Tory MP Robert Halfon for more open accounting practices and transparency from oil companies.
Halfon has been leading a campaign for cheaper fuel and petrol prices and has obtained evidence from an oil trader claiming daily benchmark prices and calendar spreads for oil options and futures are being fixed artificially high
He said: “There are allegations of price-fixing. This means that even if the oil companies are doing the right thing, the hedge funds and speculators are rigging the price of oil to keep it artificially high.”
Halfon added potential market manipulation was pushing up the price of oil on the retail markets, which is hitting motorists at the pumps.