Brent crude, the most widely used benchmark for global oil price for over 30 years, could see a revision of its price assessment methodology.
S&P Global Platts, the global provider of benchmark prices for the commodities and energy markets, on Monday announced that it was proposing two major changes in the way it calculates the price of Brent.
In a statement, Platts said that it was opening a consultation on the future development of the dated Brent price assessment, and had invited feedback to the proposals by December 10, 2018.
The first proposal for which it’s seeking industry feedback, is to start including North Sea crude on a Cost, Insurance and Freight (CIF) basis delivered in the oil hub of Rotterdam.
“Offers on a CIF Rotterdam basis for any of the five grades currently reflected in the Dated Brent assessment would be considered when evaluating the most competitively available light, sweet crude oil grade in the North Sea when assessing the value of Dated Brent itself,” S&P Global Platts said in a statement.
Currently, around a quarter of crude flowing into Rotterdam, one of the world's key crude import hubs, comes from the North Sea, another quarter comes from the Baltic region, and about a fifth from the Middle East.
The second proposal is to include similar grades of crude from outside the North Sea region for the first time. Historically, Dated Brent has focused on the most significant sources of light sweet crude oil available within North West Europe.
“In line with Dated Brent's function as an assessment of light sweet crude oil in North West Europe, S&P Global Platts is also consulting on the long-term addition of similar streams of crude oil available in the region,” the statement added.
Platts is seeking feedback on the possible inclusion into the Dated Brent CIF Rotterdam assessment of grades like Statfjord, Gullfaks, CPC Blend, WTI Midland, Qua Iboe and Forcados.
"Dated Brent is the most widely used and robust benchmark for physical crude oil. A key part of our active stewardship of the benchmark is to continue to engage extensively to safeguard Dated Brent and ensure the benchmark evolves to remain robust, well supplied and relevant to all market participants for the next decade and beyond,” Jonty Rushforth, Global Editorial Director, Energy Price Group, S&P Global Platts, said.
Comments
{{DisplayName}}
{{ElapsedTime}}