US Investigates Oil Markets

Oil giant BP is being questioned over its role in the alleged manipulation of global crude oil and petrol markets between 2002 and 2004.

It said it was co-operating in a crude oil inquiry by the US Commodity Futures Trading Commission (CFTC) and a Justice Department probe into petrol trades.

The investigations will further dent an already fragile reputation in the US.

BP faces questions over its leaky Alaskan oil pipeline and investigations into a fatal Texan oil refinery blast.

'Witch hunt'

Earlier this week, a Texan judge ordered BP chief executive John Browne to answer questions about the huge explosion, which killed 15 people in March 2005.

BP is appealing against the decision.

It is already facing legal action from the CFTC over charges that it tried to manipulate propane prices in 2004.

Energy traders, of which BP is one of the world's biggest, often use derivatives such as futures to bet on prices and manage the risk associated with major rises or falls.

"BP is known for being an extremely aggressive trader of crude, so it's an easy accusation to throw at them," said Bruce Evers, an oil analyst at Investec Henderson Crosthwaite.

"There seems to be almost a witch-hunt going on, with investigations into BP. I'm sure similar charges could be levelled at other companies."