US oil is already having an impact on the Dated Brent benchmark after the inclusion of WTI Midland on Tuesday. Midland has been added due to the long term decline in supply of the five North Sea crudes.
- WTI Midland has already served as the key price maker as prices of the five other grades that comprise the benchmark were much higher.
- Dated Brent is a light sweet basket of North Seas crude grades. Although marginally lighter and sweeter, WTI Midland trades in a similar price range to the existing Brent basket. The Texas crude is similar quality to Ekofisk, but much better than the usual price maker Forties.
- “Once adjusted for freight to a free-on-board basis, offers were competitive and helped define Dated Brent over those days of the assessment curve,” according to Platts.
- The inclusion of the WTI Midland oil will see deliverable volumes of crude underpinning Dated Brent almost triple in the coming years.
Source: S&P Global