This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration. Need a new registration confirmation email? Click here
June 26, 2013 /PRNewswire/ -- A detailed review by Platts, a global commodities information provider, shows that information provided by Swiss-based Rixo Trading International did not distort European fuel oil price assessments published by Platts, definitively refuting a recent article in The Wall Street Journal.
"Platts' sole objective is to publish price assessments that reflect true market value. We take any allegations of price manipulation very seriously and will investigate any specific allegations," said
Larry Neal, president, Platts. "When The Wall Street Journal published its source's name, we had sufficient information to undertake an in-depth analysis that proved that no data submitted by Rixo during the lengthy period reviewed ever compromised the integrity of Platts' published prices."
June 19, The Wall Street Journal published an article quoting
Halis Bektas, a trader at Rixo, as saying that, when he was scheduled to buy large quantities of fuel oil, he could drive prices down by offering "to sell small quantities...and report those offer prices to Platts." Mr. Bektas' claims provided the foundation for the article's allegation that evidence of price manipulation "shouldn't be hard to find." However, these claims were immediately suspect to Platts' editors because the rules guiding its price assessment processes require that any offer or bid out of line with prevailing market value be eliminated in the price assessment process.
The review bore this out. Platts' review covered Rixo's participation in its price assessment processes from the beginning of 2006 through to mid-2011, when Rixo last participated in the Platts price assessment process. In the course of its review, Platts determined that on
Jan. 19, 2010, Rixo made a complex offer for RMG 380 marine fuel oil delivered into
Malta that was published on Platts' Global Alert real-time service and therefore widely visible and open to market scrutiny. But Rixo's' offer price was never factored into Platts' price that day.
"Although another market participant accepted Rixo's below-market offer, the safeguards inherent in Platts' assessment processes proved effective," said
Dave Ernsberger, global editorial director, oil. "We saw that the offer was below market value and immediately reviewed the situation with Rixo and its counterparty. They cancelled the transaction by mutual agreement and we published a headline to that effect on our real-time news service." As a result, the Rixo offer was not included among the data that was considered for Platts' CIF Med high sulfur fuel oil price assessment that day.
"We regret that the Journal did not give us the opportunity to review these specific allegations before publishing them," Mr. Ernsberger said.