Oil pricing manipulation worrying experts

Daegu, South Korea – Lack in data transparency which could lead to pricing manipulation has been hounding oil markets, according to global experts.

As the debate continues over issues hurting the energy world and its consumers, pundits noted that “political and public interest in oil markets remains high”; and such raises concerns that prices are being manipulated.

The era has come, according to experts, when supply and demand fundamentals could no longer be used as the “standard line” in justifying product cost movements.

Even if some speakers argued that global oil benchmarks such as Brent, West Texas Intermediate (WTI) and those published by media groups such as Platts of the McGraw Hill Group “are still fair and transparent in calculating pricing,” this has not necessarily convinced global attendees at the conference as to “data transparency in absolute terms.”

According to Edward L. Morse, managing director and global head of commodities research at Citigroup in New York, “transparency is becoming a major issue”; especially with the rise of non-OECD (Overseas Economic Co-operation and Development) economies in the global energy market.”

And as China overtakes the United States as the largest importer of crude oil, he emphasized that “the rise of non-OECD markets brings additional challenges in the quality and transparency of data.”

Whether in bigger or smaller energy markets, lack of transparency seem to be hounding oil markets. In the Philippines, in particular, players in the oil industry have grown convenient to just citing global price fluctuations as justifications to pump cost movements – but regard for public interest had been getting blurry.

Platts, which sets indices on energy price movements but has been enjoining its subscribers to keep those information as “confidential” even if these are treated as pricing benchmarks among data-user countries, noted that the bigger question is making prices more favorable in the perspective of consumers.

“The question is not whether the price is right. It is whether you can have policies that can make the price friendlier towards you (consumers),” Jorge Montepeque, Platts global director of market reporting has noted.

Within Asia, he concurred that “China needs to take the lead if the world is going to be more transparent;” noting further that “to help tackle challenges, the US needs to overcome regulations and prohibitions on the export of crude oil following the boom in shale oil and gas production in recent years.”

He indicated “two big trends” that could prompt a change in benchmarks – primarily for Asian markets. “First, the West isn’t comfortable with prices that stand at $110 per barrel, while demand for Asia is rising fast” and that he said could shift the oil sector’s global landscape.

For Ali Hached, senior adviser to the Algerian Minister of Energy and Mining, “the rise of Asian demand” is a formidable phenomenon; and that “means we need a benchmark for Asia.”

Another expert Gary King, president and chief executive officer of Tarka Resources and former CEO of the Dubai Mercantile Exchange, emphasized though that “if change comes, it may be slow,” stressing further that “the oil industry is conservative when it comes to changing practices and adopting new benchmarks.”

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Chronicling the komedya in Antique VERA Files - The Inbox
    Chronicling the komedya in Antique

    By Alex C. Delos Santos, VERA Files The first time Cecile Locsin-Nava, a scholar on cultural studies in Western Visayas, came to Antique around ten years ago was to gather data for a research on the korido, or Philippine narrative … Continue reading → …

  • Ayungin dilemma Ramon Casiple - Parallaxis
    Ayungin dilemma

    China faces a dilemma in Ayungin Shoal and other contested areas. If it waits for the ITLOS—which may decide against it—it would have tacitly bound itself to UNCLOS and risk a rogue state reputation if it asserts its claim in the South China Sea. If its militarily acts now, it may face international isolation. …

  • 48 nabbed in biggest anti-trafficking catch in Bongao VERA Files - The Inbox
    48 nabbed in biggest anti-trafficking catch in Bongao

    By Jake Soriano, VERA Files Bongao, Tawi-tawi—A team of Marines and policemen intercepted around noon Thursday 48 people, 12 of them minors, believed recruited by a human trafficking syndicate for work in Malaysia. The arrest constitutes what advocates called the … Continue reading → …

POLL
Loading...
Poll Choice Options