The motor industry, other European businesses, consumer groups and politicians reacted furiously to the possibility that companies in the US$1.5 trillion global oil market have been rigging prices. The outburst over high energy prices was the result of a European Commission (EC) disclosure that on Tuesday officials "carried out unannounced inspections at companies active in and providing services to the crude oil, refined oil products and biofuels sectors". The investigations related to alleged price fixing and potential manipulation.

Companies raided included BP, Royal Dutch Shell and Stat oil of Norway. Total, the French company which complained last August about the way in which prices of oil and oil products were determined, was not investigated.

In a statement, the EC disclosed that it had "concerns that the companies may have colluded in reporting distorted prices to a Price Reporting Agency to manipulate the published prices for a number of oil and biofuel products".

"Rigging oil prices would be as serious as rigging Libor," said Lord Oake shott, a senior Liberal Democrat and former UK Treasury spokesman. "The price of energy ripples right through our economy and really matters to every business and families."

For sometime, dealers have remarked that as opposed to previous years, Brent oil quoted in London and Singapore exchanges has been trading at a wide premium to WTI, the crude oil quoted in New York.
Prior to 2011, Brent was at a discount of more than US$2 to WTI but currently Brent at US$102 is at a premium of around US$9 over WTI. Last year,the premium was even higher.

Source: AmFraser