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.”

Loading...

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.

  • Philippine economic growth slows to three-year low
    Philippine economic growth slows to three-year low

    Philippine economic growth in the first quarter slowed to a three-year low of 5.2 percent, well below forecasts, due to lethargic government spending and weak exports, officials said Thursday. "While growth in the private sector remains robust, the slower than programmed pace of public spending, particularly the decline in public construction, has slowed down the overall growth of the economy," Economic Planning Secretary Arsenio Balisacan told reporters. "Exports were the other source of the …

  • EM ASIA FX-Won near 2-month low on plunging yen, peso pares gains as growth weakens

    * S.Korea intervention spotted, won hits 7-year high vs yen * Philippine peso briefly weaker after Q1 growth disappoints (Adds text, updates prices) By Jongwoo Cheon SEOUL, May 28 (Reuters) - South Korea's ... …

  • Britain's tied visa rules fuel abuse of live-in maids, nannies

    By Katie Nguyen LONDON (Thomson Reuters Foundation) - When Susi, a single mother from the Philippines, left for a job in Qatar, she convinced herself it was a sacrifice worth making for her children at home. For more than a year, Susi's sacrifice involved waking before dawn and working past midnight, cooking, cleaning and looking after a Qatari family. Conditions deteriorated when Susi was brought to Britain by her boss. …

  • SE Asia Stocks - Philippines at four-month low after Q1 GDP miss

    BANGKOK, May 28 (Reuters) - Philippine shares hit a more than four-month low on Thursday after economic growth in the first quarter was slower than expected, while Thai stocks retreated after disappointing ... …

  • Philippine economic growth slows to 5.2 percent in 1Q

    Sluggish government spending slowed Philippine economic growth in the first quarter of this year, officials said Thursday. The country's gross domestic product grew by 5.2 percent in the first quarter, ... …

  • PSE to sell Makati and Ortigas offices
    PSE to sell Makati and Ortigas offices

    Set to move to a unified headquarters in Bonifacio Global City in 2016, the Philippine Stock Exchange (PSE) has issued plans to sell their offices in Makati and Ortigas. PSE President Hans Sicat issued that PSE means to sell the offices, but that they may also opt to rent them out instead. …

  • ‘Inland areas could be exposed to tsunami-like waves’
    ‘Inland areas could be exposed to tsunami-like waves’

    While strong earthquakes cause tsunamis in coastal areas, the Philippine Institute of Volcanology and Seismology (Phivolcs) warned that inland areas could also be exposed to tsunami-like waves, or seiche, if located near or around bodies of water. In a recent earthquake awareness seminar in Muntinlupa, Phivolcs supervising science research specialist Joan Salcedo explained that a seiche is a large wave similar to a tsunami, triggered by strong ground shaking from an earthquake or volcanic …

  • China gives ‘gentle reminder’ to Phl, warns small nations
    China gives ‘gentle reminder’ to Phl, warns small nations

    China gave the Philippines a “gentle reminder” last Tuesday that Beijing will not bully small countries but warned these nations not to make trouble willfully and endlessly. “Here is a gentle reminder to the Philippines: China will not bully small countries, meanwhile, small countries shall not make trouble willfully and endlessly. The Chinese Foreign Ministry also said that China would continue to build other civilian facilities on relevant maritime features in the disputed Spratly Islands …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options