Marathon unit to pay fine in oil-price case
Marathon Petroleum Co. LLC (MPC) agreed to pay a $1 million civil fine to settle a US Commodity Futures Trading Commission charge that it tried to manipulate crude oil markets.
WASHINGTON, DC, Aug. 2 -- Marathon Petroleum Co. LLC (MPC) agreed to pay a $1 million civil fine to settle a US Commodity Futures Trading Commission charge that it tried to manipulate crude oil markets.
CFTC alleged that MPC, Findlay, Ohio, tried to manipulate the spot cash price for West Texas Intermediate crude delivered at Cushing, Okla, on Nov. 26, 2003, by attempting to influence downward the market assessment for the crude that day by Platts, McGraw-Hill Co.'s energy news and price-reporting service.
Platts derives its WTI market assessment, which is used as a benchmark price in some transactions, from trading activity during a particular 30-min period of the physical trading day. CFTC said MPC priced approximately 7.3 million bbl/month of physical crude off the assessment at the time in question.
CFTC charged that on Nov. 26, 2003, MPC purchased WTI contracts on the New York Mercantile Exchange with the intention of selling physical WTI during the Platts window at prices intended to drive the reporting service's WTI spot cash assessment downward. The company also offered WTI through the prevailing bid at a price level aimed at driving the Platts WTI assessment lower, the regulator said.
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