US judge says BP traders manipulated natural gas market

BP could face a $48m fine after a US regulatory judge ruled that the oil giant’s energy traders rigged the natural gas markets in Texas following hurricane Ike in 2008.

Carmen A. Cintron, an administrative law judge for the US Federal Energy Regulatory Commission, found BP had flooded a Texas delivery point with natural gas in order to push down prices in the physical market, while also placing trades in financial markets to benefit from the lower prices.

Cintron said: “BP engaged in market manipulation. This is a classic case of physical for financial benefits.”

BP said on Thursday that it would appeal the decision.

"We strongly disagree with today's decision by the FERC Administrative Law Judge," BP spokesman Geoff Morrell said in a statement. "The evidence overwhelmingly demonstrated that BP's natural gas traders did not engage in any market manipulation."

At the beginning of July, BP reached an agreement to settle all federal and state claims related to the 2010 Gulf of Mexico oil spill, at a cost of up to $18.7bn spread over 18 years.

At 0935 BST, BP shares were down 0.8% at 380.15p.