For Release: August 1, 2007
Marathon Petroleum Company LLC Agrees to Pay $1,000,000 Civil Penalty to Settle U.S. Commodity Futures Trading Commission Charges of Attempted Manipulation in Crude Oil Markets
CFTC Order Finds That Marathon Petroleum Company LLC Attempted to Manipulate Crude Oil Prices by Influencing the Platts Crude Oil Assessment
Washington, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) today announced the issuance of an order filing and simultaneously settling charges against Marathon Petroleum Company (MPC), a subsidiary of Marathon Oil Corporation, based in Findlay, Ohio, for attempting to manipulate a price of spot cash West Texas Intermediate (WTI) crude oil delivered at Cushing, Oklahoma on November 26, 2003, by attempting to influence downward the Platts market assessment for spot cash WTI for that day.
The August 1, 2007, order requires, among other things, that MPC pay a $1,000,000 civil monetary penalty.
“West Texas Intermediate crude oil prices have an enormous impact on the daily lives of American citizens. The CFTC continues to aggressively ferret out illegal conduct in the energy sector. As the guardian of the nation’s commodity markets, this case is yet another signal to the markets that we hold all companies accountable for their trading activities,” said Gregory Mocek, the CFTC’s Director of Enforcement.
The Platts market assessment for WTI is derived from trading activity during a particular 30-minute period of the physical trading day. The Platts market assessment for WTI is used as the price of crude oil in certain domestic and foreign transactions. At the time in question, MPC priced approximately 7.3 million barrels of physical crude oil per month off the Platts market assessment for WTI.
As a net purchaser of foreign crude oil priced off of the Platts spot cash WTI assessment, if its conduct was successful, MPC would have benefited from a lower Platts spot cash WTI assessment. The order finds that, on November 26, 2003, MPC purchased NYMEX WTI contracts with the intention of selling physical WTI during the Platts window at prices intended to influence the Platts WTI spot cash assessment downward. Further, during the Platts window, MPC knowingly offered WTI through the prevailing bid at a price level calculated to influence downward the Platts WTI assessment.
The following CFTC Enforcement Division staff were responsible for the case: Allison Lurton, Maura Viehmeyer, Laura Gardy, Kevin Webb, Gretchen L. Lowe, and Vincent A. McGonagle.
Last Updated: July 31, 2007