LONDON (February 14, 2022)– S&P Global Platts ("Platts"), the leading independent provider of information, analytics, and benchmark prices for the commodities and energy markets, has today proposed changes to its Dated Brent and Cash BFOE methodology, and all related assessments. These proposed changes follow extensive market consultation and represent the next market engagement step following its joint white paper and previous consultations on the evolution of the Brent complex.
Platts proposes to reflect cargoes of WTI Midland crude oil in its Dated Brent and Cash BFOE crude oil benchmarks, with effect from June 2023 cargo deliveries. Under this proposal, physical cargoes of WTI Midland crude oil could be bid or offered in the Platts Market On Close price assessment process for Dated Brent from the first publication day in May 2023, and the associated June Cash BFOE value assessed from February 2023.
Platts proposes to maintain the assessment of the Dated Brent benchmark and cash BFOE as free on board (FOB) North Sea values. Following strong support for a larger cargo size in the existing basket, and to support the proposed inclusion of Midland WTI, Platts proposes moving all Dated Brent and cash BFOE cargo sizes to 700,000 barrels from 600,000 barrels.
Platts is now seeking further market feedback on these proposed changes.
Joel Hanley, Global Director, Crude & Fuel Oil Price Reporting, S&P Global Platts, said: "We are proposing that WTI Midland cargoes become a formal part of our MOC process for Dated Brent, Cash BFOE and related assessments. This would be the first time that a crude grade from outside of the North Sea would be reflected in the Brent complex. The objective of the market consultations and proposed changes is to reflect a solution for strengthening and ensuring a robust Brent complex for the decades ahead. Since US crude oil export restrictions were lifted in 2015, WTI Midland crude has established itself as a mainstay in the European refining sector and increasingly reflected seaborne market fundamentals."
The proposal note lays out in detail a pathway for the inclusion of WTI Midland in the Platts Dated Brent benchmark, Cash BFOE and all related instruments. Platts welcomes feedback from all market participants ahead of publishing a decision note. The feedback deadline is March 28, 2022.
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