Oil Probe Circle Widens (Updated)

Neste Oil Oyj, Finlands only refiner, joined the side of investigated oil companies by the European Commission. Neste announced it was asked to provide information about potential manipulation of global crude and biofuel markets. Representatives said the company is not a target of the investigation and will cooperate. Statoil ASA, one of the investigated refiners, said meanwhile it has “zero tolerance” for breaches of rules. On Thursday Platts London bureau, was thoroughly searched by the European anti-trust investigators.

A Hungarian biofuel producer, Pannonia Ethanol, was the first company to announce it had filed a complaint against Platts, in reference to the procedure, which the pricing agency uses to vet new companies before permitting them to participate in the pricing mechanism. According to Pannonia Ethanol, the company has been rejected multiple times, despite complying to all requirements. Platts said it followed an established process. The probe will continue.

Craig Pirrong, director of the University of Houstons Global Energy Management Institute said: “Its likely that this will metastasize. A lot will depend on what happens when they start looking through e-mails, texts and IMs, because these companies are talking to other market participants and the circle could widen relatively quickly.”

Andy Lipow, president of Lipow Oil Associates LLC in Houston, said in a phone interview to Bloomberg yesterday that other companies may be involved in the investigation and are likely to have received formal notification by the European Commission, but just havent acknowledged it publicly.

(Update) Argos Energies, a mid-sized Dutch trading house, is the next one to join the team of investigated companies by the European Commission for possible oil price manipulation. Argos Energies deals in physical oil products and owns storage facilities and was visited by inspectors on Tuesday, a source familiar with the investigation told Reuters today. This backs earlier comments from experts in the sector who predicted the circle of companies to come under scrutiny might widen.