BP has hit back at US regulator accusations, that the oil giant has manipulated the natural gas market and is up for a $28m fine, by stating that the allegations are "without merit".

The US Federal Energy Regulatory Commission's (Ferc) Office of Enforcement claims BP's Southeast Gas Trading desk manipulated the next-day, fixed-price gas market at Houston Ship Channel from mid-September to November 2008.

Ferc has given BP 30 days to show why it should not be found to have manipulated the market. The allegations were first made in 2011 by Ferc but the regulator has found that, two years' on, that it has enough evidence to back-up the claims for BP to defend itself.

In the original Ferc staff notice of alleged violations, the regulator said it "alleges that BP accomplished its fraud by using transportation capacity between the two markets uneconomically."

"In doing so, BP contributed to lower HSC Gas Daily daily indices to increase the value of its financial positions by making early and repeated sales; using high market concentrations; and by trading relationally to its financial spread."

However, BP hit back against Ferc's latest move.

"These allegations are without merit and we stand by what we previously disclosed publicly in February 2011 - that BP natural gas traders did not engage in any market manipulation in late 2008," said Geoff Morrell, BP vice president and head of US communications.

"BP is disappointed that the Ferc has brought this action and we will vigorously defend against these allegations.

"The Ferc bases its allegations on a recorded two-minute phone conversation between a BP trainee and BP natural gas trader that the regulator has taken completely out of context. The recording does not support any allegation of wrongdoing.

"In fact, the trainee involved in the conversation states that his characterisation was incorrect and the trader never agrees with nor condones the trainee's statements. The trader also reacts strongly to the trainee's comments and interrupts him because the trainee's comments - as the trainee admits on the call - are incorrect and inappropriate.

"The trader also promptly reported the conversation and BP's compliance personnel acted appropriately in examining the trading at issue."

The pursuing of the BP case is just the latest in a string of actions taken by Ferc.

Investment bank JPMorgan was fined $410m (£268m, €309m) by Ferc for manipulating the physical power markets.

Ferc also ordered Barclays and four of its traders to pay $453m in total fines for rigging physical electricity markets, but the bank said it would "vigorously defend" itself against the allegations.