Parnon Energy and Arcadia Petroleum agreed to pay a $13million settlement fee in the wake of a price-rigging suit.
The oil logistics company and the oil trader agreed the deal after US Commodity Futures Trading Commission (CFTC) filed a lawsuit alleging the companies made more than $50million in 2008 on the back of trading derivatives tied to WTI crude prices.
The defendants originally tried and failed to get the 2011 lawsuit thrown out when US District Judge William Pauley III ruled in favour of the regulator.
Despite agreeing the substantial cash settlement, the companies have neither denied or admitted fault.
Under the settlement agreement Parnon Energy will also be constrained on its physical market trading for three years and both defendants must supply the CFTC with a list of their crude oil positions on a weekly basis.
“Beyond the terms of the order, my only comment on behalf of the defendants is that we are pleased to have resolved this matter with the CFTC,” Paul Adams, Parnon Energy’s chief executive officer, said in an e-mail.
The companies which are both subsidiaries of Farahead Holdings are the latest to stand under the price rigging spotlight. More than a dozen lawsuits accuse traders of conspiring with companies including BP Plc, Statoil ASA and Royal Dutch Shell Plc to manipulate the price of Brent crude – the North Sea oil benchmark is used to price more than half the world’s crude that helps determine the costs for fuels such as gasoline and heating oil.
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