Morgan Stanley has withdrawn the Platts oil trading window after questions were raised about its credit standing in the multi-billion dollar market for physical cargoes of crude oil.

Platts, which publishes benchmark prices for Brent and other oil products is believed to have put Morgan Stanley under review after trading houses said they were not prepared to deal with the bank.

Morgan Stanley, which is a leading player in the energy markets said it had decided not take part in Platt’s daily bulletin board of bids and offers for oil cargoes. Oil traders suspect that the bank wished to avoid further scrutiny of its credit standing.

The Platt’s system is an electronic window into the physical oil market in which oil companies, refiners, commodity traders and investment banks publish purchase and sale terms for cargoes of crude oil. It is not an exchange and participants deal directly with each other at their own risk.

Bids published in the window form the basis of Platts daily price assessment for Brent crude, a value which underpins the global oil market. Platts pricing has been the benchmark for oil trading for generations and The reliability of the information communicated by counterparties is key to its credibility which the organisation guards jealously.

A source with close knowledge of Platts said: “Counterparty acceptance is a huge problem right now in commodity markets too. We have situations where entities in the oil industry will not trade with a bank.”

Morgan declined to give a reason for its decision not to publish its bids in Platts’ Asian oil trading window. The bank said that the decision to participate in the Platt’s window was taken by its traders on a daily basis.

Morgan has been one of the biggest players in the oil market and its withdrawal has raised questions about how the credit squeeze will affect liquidity in the commodity markets.

One oil trader, who declined to be named, suggested that credit was an issue in trading with banks. “A couple of houses have said that on the standard terms they wouldn’t trade with banks.”

Oil traders suspect that bank wanted to avoid questions being raised about its credit standing what has been a key business for the bank. Credit standing is key for a trading business conducted principal to principal. Unlike financial trading, there is now clearing house for trade in oil cargoes and traders must make their own judgments. Typically, oil companies have lists of acceptable trading partners, often highlighted as “green”, “amber” or “red”.

Platts declined to comment on the Morgan Stanley withdrawal but the organisation is known to be deeply concerned about the integrity of its pricing system at a time when big oil trading houses are asking questions about the ability of banks to settle transactions.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive