Findlay, OH – August 1, 2007 – The U.S. Commodity Futures Trading Commission (CFTC) today announced a settled enforcement action against Marathon Petroleum Company (MPC) for attempting to manipulate the price of West Texas Intermediate (WTI) crude oil. The alleged manipulation occurred on November 26, 2003, targeting the Platts market assessment for spot cash WTI delivered at Cushing, Oklahoma.
According to the CFTC, MPC attempted to drive down the Platts assessment by strategically trading New York Mercantile Exchange (NYMEX) WTI contracts and offering physical WTI at artificially low prices during a critical 30-minute trading window. The Platts assessment is a benchmark price used in numerous crude oil transactions, both domestically and internationally. MPC, as a significant purchaser of foreign crude oil priced off this assessment, stood to benefit financially from a lower price.
The CFTC’s order details that MPC purchased NYMEX contracts with the intent of selling physical WTI at prices designed to suppress the Platts assessment. During the relevant trading period, MPC knowingly offered WTI below prevailing bids, further aiming to lower the benchmark price.
As a result of the investigation, MPC will pay a $1,000,000 civil monetary penalty. CFTC Director of Enforcement Gregory Mocek emphasized the agency’s commitment to policing illegal activity in the energy sector, stating, “West Texas Intermediate crude oil prices have an enormous impact on the daily lives of American citizens… this case is yet another signal to the markets that we hold all companies accountable for their trading activities.”
The case was led by CFTC Enforcement Division staff including Allison Lurton, Maura Viehmeyer, Laura Gardy, Kevin Webb, Gretchen L. Lowe, and Vincent A. McGonagle.
Source: CFTC.gov
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