Appeals court on Tuesday reversed a decision by the Federal Energy Regulatory Commission that had ruled a crude oil pipeline owned by Exxon Mobil Corp (XOM.N) had market power, and thus the rates it charged had to be capped.

     The Court of Appeals for the District of Columbia Circuit said that the record showed that producers and shippers of Western Canadian oil had "numerous competitive alternatives" to the Pegasus pipeline for moving the oil.

     The Pegasus pipeline, which runs from Illinois to Texas, "does not possess market power," the appeals court ruled.