G20 report: Oil prices could be rigged
July 17 , 2012
A report commissioned by the G20 group of the world's biggest economies has warned oil prices could be exposed to a Libor-style rigging scandal.
The International Organization of Securities Commissions (IOSCO) has stated the current system of oil price reporting is "susceptible to manipulation or distortion."
Benchmark prices are compiled by price reporting agencies.
Both the Libor lending rate and spot oil prices are essentially based on a system of trust and in effect are unregulated.
Platts, the biggest agency in the market, has reiterated that it “…and other IPROs (Independent Price Reporting Organisations) have no vested interest in the markets they cover. We are subscription-based companies and never pay in any fashion for market participants to submit data to our assessment processes."