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Noble Group re-admitted to Platts' oil pricing process: sources
[SINGAPORE] Commodity trader Noble Group has been re-admitted to the trading processes used to set global oil prices by reporting agency Platts, after having been barred from full participation in April, according to two people familiar with the matter.
Noble, the Singapore-listed merchant that has been battling criticism of its accounting practices this year, was barred from acting as a "market maker" - actively offering both bids and offers to facilitate trading - in Platts' half-hour price assessment process known as Market-on-Close (MOC).
"Noble was re-admitted to take part in these Platts windows earlier this week," said one source familiar with the matter, using the term traders often use to refer to the MOC process.
The other source said "it was back to business" for Noble and that the company was admitted back to the MOC this week.
Reuters could not establish why Noble had been barred from full participation in the MOC process. Noble and Platts have both declined to comment on the matter.
Platts, part of McGraw Hill Financial Inc, operates the MOC process by using trades, bids and offers to set physical oil prices around the world. Its benchmarks are used to settle billions of dollars worth of oil contracts.
Platts sometimes bars companies from participation in the MOC due to market turmoil because of concerns over their finances or trading behaviour. Often the exclusions are brief.
Other reasons for companies being "boxed" - or excluded from the MOC - include breaching the terms of a given deal.
Noble has been under increased scrutiny this year after Iceberg Research's allegations that the trader had inflated asset values by billions of dollars, against which the company has staunchly defended itself.
Noble has since provided more disclosures about its fair value accounting. It also said it has seen some marginal reduction in credit terms from a handful of counterparties since the accounting controversy surfaced.
Noble's shares are still down about 30 per cent since mid-February and its credit default swaps (CDS) - a measure of its default risk that is closely watched by trading counterparties - have risen over 20 per cent since then.