Was Oil Manipulated Too?
Concerns are growing about the reliability of oil prices, after a report for the G20 found the market is wide open to “manipulation or distortion”.
Traders from banks, oil companies or hedge funds have an “incentive” to distort the market and are likely to try to report false prices, it said.
Politicians and fuel campaigners last night urged the Government to expand its inquiry into the Libor scandal to see whether oil prices have also been falsely pushed up.
They warned any efforts to rig the oil price would affect how much drivers pay at the pump, which soared to a record high of 137p per litre of unleaded earlier this year.
Robert Halfon, who led a group of 100 MPs calling for lower fuel prices, said the matter “needs to be looked at by the Bank of England urgently”.
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Prediction: one of these stories will finally lead to the dropping of the free market links on the right of ad orientem. It took me many years to accept that unregulated markets are *very bad things* as well.
ReplyDeleteAnon - you surely must be protesting the fact that unregulated markets in computers have delivered lower prices for computing power year after year.
ReplyDeletePrice-fixing, whether by government dictate or private fraud, is simply not sustainable over any real term because it is ultimately the consumer, not the producer, who determines the market-clearing price.
Since the largest oil producers are state-owned, I'd enjoy seeing the spectacle of any investigation going nowhere.
ReplyDeleteAre prices an objective fact? Only from an historical perspective.