Posted by KC Loh > 2013-05-22 11:11 | Report Abuse

watch out for Russia! potential problem ahead if oil price plummet!

Posted by yahoo80 > 2013-05-22 11:13 | Report Abuse

any effect on oil n gas counter ?

Posted by nanoman > 2013-05-22 11:27 | Report Abuse

is it related to the issue where US starts to tap their oil reserve ?

Posted by KC Loh > 2013-05-22 12:30 | Report Abuse

park here first: http://biz.thestar.com.my/news/story.asp?file=/2013/5/22/business/13140153&sec=business

WHISPERS of oil price manipulation are travelling fast down the hallways of the world's oil markets.

After a short silent spell, the oil market sprang a surprise via the double raiding of niche trading house Argos and price fixing agency Platts.

Dutch trading house Argos Energies, a mid-sized trading company that deals in physical oil products and owns storage facilities, was visited by inspectors from the European Commission last week, says Reuters, quoting a source familiar with the investigation.

The visit occurred on the same day that authorities raided the London bureau of Platts, and the offices of Statoil, Royal Dutch Shell and BP.

If proven right, this could be the largest cross-border investigation involving rates, shortly after the benchmark Libor interest rate-rigging scandal.

Major banks have just paid hefty fines; sometimes, with the chief executive officer or top officials of banks having to fork out their own money to make up for the shortfalls.

Occasionally, there has been a hue and cry over oil price manipulation, but this time, the context is different.

Last week's action was the first time the European Union was taking a look at the case.

Regulators have sharpened their teeth since major banks were caught fixing Libor interbank rates, the rates at which banks borrow from each other.

The impact of such rigging is obvious other world interest rates are affected and so is their pricing and profit.

In Washington, the chairman of the Senate's energy committee asked the Justice Department to investigate whether alleged price manipulation had boosted fuel prices for US consumers.

“Efforts to manipulate the European oil indices, if proven, may have already impacted US consumers and businesses, because of the inter-relationships among world oil markets and hedging practices,” senator Ron Wyden, the chairman of the Senate Energy and Natural Resources Committee, wrote in a letter to attorney-general Eric Holder.

That letter is being reviewed by the Justice Department.

Those found manipulating oil prices for their own profit should be severely dealt with, as the trickle-down effects of large-scale collusion can be very damaging.

If large countries like the United States might have already felt the impact, what about the smaller countries?

High oil prices often affect the price of transportation and manufacturing.

Prices of food and consumables increase in tandem, affecting even the basic prices for the man-in-the-street.

Bad behaviour is not just confined to some investment banks; we might be seeing it in the oil markets as well.

The impact is widespread and it is mostly the taxpayer who picks up the tab.

The price of oil has been hovering around US$100 (RM301.86) per barrel for the past two years, says Reuters. It spiked up three times to around US$120 per barrel in 2008, 2009 and 2011.

The investigation is focused on whether there was collusion to distort prices of crude, refined oil products and ethanol traded during the market-on-close window.

Platts, a unit of McGraw-Hill, provides clients with price benchmarks set by reporters for opaque energy markets, according to Reuters.

Its assessments are used to close physical and derivative deals worth billions in a US$2.5 trillion market.

,LI> Columnist Yap Leng Kuen is against one group going ahead of others.

Posted by lotusf1 > 2013-05-22 12:48 | Report Abuse

OPEC controlled about 42% of world oil production and as long as the price is above $70 to $80/barrel ,they still make money.IF demands continue to drop below that level or approaching ,OPEC would certainly need to regulate their output to bring down supply.

Posted by happyman > 2013-05-25 11:46 | Report Abuse

if USA shale gas production on the rise, and US is self sufficient in oil & gas . the price of oil may drop badly . Will it affect Malaysia? PETRONAS is investing 300 billion in the next 5 years . would it be affected ?

Posted by iafx > 2013-05-25 16:29 | Report Abuse

if cost of petrol goes down due to better supply and not because of weak demand, it actually helps to curb inflation. for o&g companies, they will have to reduce operating cost for the same (or less) yield in this case.