U.S. probes BP energy trades

ASSOCIATED PRESS

Federal investigators reportedly are looking into whether BP PLC manipulated crude-oil and gasoline markets, the latest in a string of inquiries into the British oil company.

A company spokesman confirmed BP is cooperating with authorities, but gave no details.

The U.S. Commodity Futures Trading Commission has subpoenaed BP and energy traders in its oil investigation, which is focused on manipulation of over-the-counter markets in 2003 and 2004, the Wall Street Journal reported yesterday, citing unnamed lawyers and traders close to the cases.

The over-the-counter market includes trades conducted on the phone or electronically in products not listed on exchanges.

The separate gasoline probe, which has been continuing for more than a year and includes a criminal inquiry by the Justice Department, is examining a single day’s trading on the New York Mercantile Exchange in 2002, the report said.

“We routinely assist regulators and other authorities in their requests to understand the facts related to our business,” BP spokesman Robert Wine said in London. “However, we don’t comment on the specifics of these requests or the agencies that make them.”

CFTC spokesman Alan Sobba in Washington said his agency would not “confirm or deny the existence of an investigation or anything about it.”

In June, federal investigators said BP energy traders cornered the U.S. propane market in the winter of 2004 and illegally manipulated prices, driving up heating and cooking costs for rural consumers.

Details of the scheme, compiled with help from internal company documents and recorded conversations, were outlined in a civil lawsuit the CFTC filed against BP Products North America, a Warrenville, Ill., unit of the London company.

One former BP trader who in June pleaded guilty to partaking in a conspiracy “to manipulate and corner the propane market” — Dennis N. Abbott of Houston — agreed to cooperate with federal law enforcers in an ongoing criminal investigation conducted by the FBI, the Justice Department said at the time.

BP has denied any wrongdoing in the propane market and said it intends to fight the charges in court.

On Sept. 7, the House Energy and Commerce Committee will look at BP’s corrosion-control practices for its pipelines at Prudhoe Bay, such as those involved in two spills this year.

BP’s U.S.-traded shares fell $1, or 1.5 percent, to close at $67.30.