By Amanda Cooper
LONDON (Reuters) – Oil pricing agency S&P Global Platts has moved closer to revamping its dated Brent benchmark, launching new price assessments for two grades of U.S. crude in Europe in response to the swell of imports into the region.
S&P Global Platts, which publishes the daily Brent benchmark price that underpins two-thirds of the world’s oil trades, said it would provide daily price assessments for West Texas Intermediate Midland and Eagle Ford 45, both light, sweet crudes for delivery to Rotterdam in northwest Europe and Augusta in the Mediterranean.
“We have long said that one of the possible futures for the North Sea is to incorporate delivered values and we have said there are a range of possible grades from outside the region that could play that part,” S&P Global Platts senior director Jonty Rushforth said.
U.S. crude oil exports are now above 2 million barrels per day, having grown swiftly since a decades-old restriction was lifted nearly two years ago. S&P Global Platts estimates that roughly 400,000 to 500,000 bpd of that total comes into Europe.
This rise “has created opportunities not only for sellers of U.S. crude, but also a diverse set of buyers around the world,” said Vera Blei, S&P Global Platts head of oil markets.
The dated Brent benchmark is backed by five North Sea crudes – Brent itself, Forties, Oseberg, Ekofisk and Troll (BFOET).
Major traders in the oil market, such as Vitol [VITOLV.UL] and Royal Dutch Shell <RDSa.L>, have urged Platts to include other grades in its pricing process to combat the natural decline in supply of the current benchmark crudes that the world’s oldest deepwater basin produces.
(Reporting by Amanda Cooper; Editing by Louise Heavens)