Oil prices could be rigged by traders warns G20 report
16 July 2012 Last updated at 12:40 ET
BBC News
Both the Libor inter-bank lending rate at the heart of a global rate-rigging scandal and spot oil prices are based on a system of trust. They are, effectively, unregulated.
Traders at various banks voluntarily report the prices they pay for oil contracts to Platts, Argus or one of their competitors. The price reporting agency use a number of trades to decide what the benchmark price, quoted to the outside world, should be.
IOSCO said that "this creates opportunity for a trader to submit a partial picture, i.e. an incomplete set of its trades in order to influence the assessment to the trader's advantage."
Monday, July 16, 2012
DOES CAPITALISM NEED A MULLIGAN?
The LIBOR scandal is in essence the MOTU faking numbers for their own advantage and the same may have happened with other benchmark numbers for oil and gas prices.
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