NEW YORK, June 24 (Reuters) - The U.S Federal Trade Commission has followed the European Union in opening a formal probe into how crude oil and refined fuel prices are set, Bloomberg News reported on Monday.
It said the investigation was in a preliminary stage, but would likely broaden. The FTC is reviewing the progress of European authorities and has agreed with the Department of Justice's antitrust division to handle the probe, Bloomberg reported, citing two people familiar with the matter.
The FTC has conducted several inquiries into U.S. oil prices over the past few years and is often called on to investigate possible price-fixing when prices surge. But the agency has generally found that market forces such as China's growing demand or a refinery shutdown are to blame.
Those investigations have also typically been focused on market fundamentals rather than the mechanics of setting benchmark prices, a process that is under increased scrutiny following revelations that some of the world's biggest banks have been rigging the Libor interest rate benchmark.
A spokesman for the FTC declined to comment.
The probe comes more than a month after European authorities raided the offices of Royal Dutch Shell Plc, BP Plc and Statoil ASA to investigate suspected manipulation. They also visited price publisher Platts, a unit of McGraw-Hill Financial Inc, whose daily price assessments are widely used as a benchmark in oil markets.
Platts has not been contacted by the FTC, but is ready to "fully cooperate" with regulators to ensure the oil market functions effectively, spokeswoman Kathleen Tanzy said.
News that Washington has taken up the investigation might come as little surprise given growing trans-Atlantic enquiries and the sharp focus on financial benchmarks globally.
The fact that the FTC, not the Justice Department, is leading the enquiry suggests any charges that result might not be criminal in nature, Bloomberg reported.
Platts oil prices are widely used in the United States as benchmarks for long-term contracts or derivative trades, and are generally set using a market-on-close (MOC) system similar to Europe's, during which a series of bids, offers and trades in a half-hour period are used to establish prevailing prices.
Other independently owned price reporting agencies (PRAs), including Argus and OPIS, are also used as benchmarks in certain markets.
Platts is in the process of implementing a set of proposals put forward by an International Organisation of Securities Commissions (IOSCO) study that laid out recommended best practices for PRAs, and will have those verified by an external auditor by October, Tanzy said.
Thomson Reuters Corp, parent of Reuters news, competes with Platts in providing news and information to the oil market.