Total warns over "inaccurate" benchmarks One of the world's largest oil trading groups has warned of "inaccurate pricing" in the benchmarks for the energy market that underpin billions of dollars of trading each day in contracts such as Brent and West Texas Intermediate. Total Oil Trading SA, the trading arm of Total of France, has told international regulators that "several times a year, estimates of market prices on key [energy] indices ... are out of line with our experience of the day." The International Organisation of Securities Commissions, an umbrella group of financial regulators, last week backed away from its initial tough proposals for regulation of the benchmarks in the physical energy market. However, in a letter to Iosco, Total Oil Trading SA said that the way the benchmarks were calculated sometimes did not assure "an accurate representation of the market and consequently deform the real price levels paid at every level of the price chain, including by the consumer." The trader, which is based in Geneva, added that "inaccurate pricing" was not only affecting the price of private, bilateral over-the-counter derivatives, but that "end-users are directly impacted by erroneous prices." Oil executives said the discrepancies were in the order of cents per barrel, rather than dollars. The unusually candid public comments by the trading arm of Total have broken the omertà of the energy physical trading industry, a close-knit community in London, Geneva, Singapore and Houston where disputes are usually settled in private. Scrutiny of pricing in the energy market comes after the discovery of widespread manipulation of Libor, the benchmark for borrowing in interbank lending Total Oil Trading undertakes activities similar to the trading arms of BP and Royal Dutch Shell and independent traders including Vitol and Glencore. The letter, dated August 24, was released late on Friday by Iosco as an annex to its report about the physical energy market and the price-reporting agencies that collect and publish benchmarks, which largely suggested retaining the current status quo. Other oil companies whose letters were released, including BP and Saudi Aramco, defended the current system. Total on Monday said in a statement that while it was "satisfied with the majority of the work done" by the price reporting agencies, its objective was to "to support any initiative encouraging even more transparent methodologies." The company added: "The current methodology contains, in very few cases, a small part of subjective judgment ... We believe that this part of judgment could be mitigated. Iosco, which groups financial regulators including the UK Financial Services Authority and the US Commodity Futures Trade Commission, sought this year to regulate the market in which price-reporting agencies, including Platts, a unit of New York-based McGraw-Hill, gather data about bids, offers and trades and using proprietary methodologies publishes prices in what are otherwise opaque markets.