Thursday, June 29, 2006
WASHINGTON - Detailed allegations by federal investigators that BP traders illegally manipulated propane prices in 2004 could hurt the oil and gas industry's image at a time when consumers and Congress are upset about soaring energy costs and record profits.
Executives from BP PLC and other major oil companies have testified before Congress and stressed in TV interviews that today's sky-high prices for gasoline and other fuels are the result of market forces beyond their control — not improper behavior on the part of industry.
"Well, that's going to be a tough sell when you have headlines showing that they caught you manipulating the market," said Phil Flynn of Chicago-based Alaron Trading Corp.
Even though a nine-month probe concluded last month by the Federal Trade Commission found no widespread effort by the industry to inflate gasoline prices, Flynn said "everybody is going to use this one incident as proof positive that the big oil companies are manipulating every market. It's going to be guilt by association."