BP accused of manipulating US gas

A US energy regulator Monday proposed to fine oil giant BP $28 million for allegedly manipulating the natural gas market in 2008. The Federal Energy Regulatory Commission charged that a team of Texas-based traders for BP America undertook a number of trades in late 2008 that deliberately lost money as part of a \"manipulative scheme\" to fix prices and boost profits. A FERC staff report said the scheme was revealed in a recorded phone call between two of the traders, which came after a senior BP official expressed concern at the propriety of the trades, The FERC said the operation had sought to artificially maintain for nearly two months a large spread between prices at two southeast US locations that initially arose from market disruptions caused by a hurricane. Doing so significantly increased the value of contracts held by the trading team, the report said, netting BP around $800,000 gains. The taped phone conversation proved \"sufficient to provide staff with an outline of the Texas team\'s manipulative scheme,\" the FERC report said. In addition to the proposed $28 million penalty, BP would be required to disgorge $800,000 under the FERC action. BP called the allegations \"without merit\" and said it will \"vigorously\" contest them. BP vice president Geoff Morrell said in a statement that the phone conversation, which he said was between a trainee and a trader, was \"completely\" taken out of context. \"The recording does not support any allegation of wrongdoing,\" Morrell said. \"In fact, the trainee involved in the conversation states that his characterization was incorrect and the trader never agrees with nor condones the trainee\'s statements.\" \"We stand by what we previously disclosed publicly in February 2011 -- that BP natural gas traders did not engage in any market manipulation in late 2008,\" he said. BP has 30 days to formally respond to the FERC\'s finding.