![]() ![]() Some changes are already getting underway. The process will place an emphasis on Platts’s assessments of tanker costs. If that were to be $1 a barrel, then the implied FOB price of WTI Midland in the North Sea would be about $80. To do that, it will use what it calls a freight adjustment factor, deducting the estimated cost of transportation across the North Sea to Rotterdam. Platts would need to make that delivered cargo like-for-like against the existing BFOET grades, which are transacted on a so-called Free on Board, or FOB, basis in the North Sea. Imagine the existing Dated grades, which go under the acronym BFOET, are at $80 a barrel.Ī trader might pick up a cargo of WTI Midland at $79 from a terminal the US Gulf with $2 added delivery cost to Rotterdam - more than 6,000 miles and around 17 days sailing away. So WTI Midland might then influence the price a seller of an Atlantic Basin barrel charges a refinery in China. If Platts judges that WTI Midland is the most competitive price on offer - or actually sold - then it could set Dated. It will be delivered into Rotterdam and then price will be netted back using a freight adjustment factor as if it’s shipped from the North Sea.īy following a careful process, Platts will evaluate if the oil is being offered at a higher or lower level than five existing grades that set Dated - Brent, Forties, Oseberg, Ekofisk or Troll. Traders will be able to offer WTI Midland for sale from the US Gulf Coast. In addition, the benchmark lies at the center of a complex web of derivatives, ultimately shaping Brent oil futures that get traded on exchanges.ĭated affects a host of oil prices, so even crude in Dubai could feel the effects, according to Adi Imsirovic, a veteran oil trader and senior research fellow at the Oxford Institute for Energy Studies. Oil producing states will often sell their barrels at small premiums or discounts to Dated, so the precise mechanics of how it is formed matter to them. Here’s a look at what matters as the transition gets closer.ĭated, as it’s commonly known by oil traders, helps to set the price of about two-thirds of the world’s oil and even defines the price of some gas deals. From cargoes for June onward, West Texas Intermediate Midland, oil from the Permian will become one of a handful of grades that set the Dated benchmark. BP Plc at one stage said that Dated Brent was subject to “increasingly regular dislocations.”īut the future of Dated is now set. Its switchover was fraught with controversy and caused a lot of stress among physical oil traders. As such, its publisher S&P Global Commodity Insights - better known by traders as Platts - has been forced to make a dramatic overhaul. The shift is because the existing benchmark, Dated Brent, is slowly running out of tradable oil for it to remain reliable. US Air Force Plans to End Lockheed Hypersonic Weapon Program Scotiabank Economist Excoriates Trudeau, Freeland Over $32 Billion Spending Boost $335,000 Pay for ‘AI Whisperer’ Jobs Appears in Red-Hot Market ![]() New Yorkers Are Moving to These Three Florida Cities $52 Billion Chipmaking Plan Is Racing Toward Failure (Bloomberg) - After years of wrangling, the world’s most important oil price is about to be transformed for good, allowing crude supplies from west Texas to help determine the price of millions of barrels a day of petroleum transactions. ![]()
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