Global energy and commodity price reporting agency Argus today launches price assessments for a range of crude oils delivered to the northwest European refining centre of Rotterdam. The new assessments are the first step in an initiative to add liquidity to Atlantic basin benchmark North Sea Dated and protect it against distortions.
North Sea Dated, also known as Dated Brent, has come under increasing scrutiny in recent months as some of the North Sea grades that form the benchmark — Brent, Forties, Oseberg, Ekofisk and Troll — have regularly been in short supply in the region as a result of pipeline disruptions and growing demand to ship cargoes to the Asia-Pacific market.
Industry opinion is coalescing around the view that the North Sea benchmark needs to take account of price indications for competing light sweet crudes available in the northwest European market. This will ensure that North Sea Dated continues to represent regional supply and demand fundamentals, undistorted by the regular removal of key benchmark grades Forties and Ekofisk from the region.
The new cif (delivered) Rotterdam assessments for seven grades of crude — Azeri BTC Blend, Kazakh CPC Blend, Algerian Saharan Blend, Nigerian Bonny Light, Qua Iboe and Escravos, and US WTI Houston — will be published in the daily Argus Crude report. Prices will be based on confirmed trade, bids and offers in the open market as well as a survey of market participants’ views on tradeable levels.
Argus will consult closely with the industry once market participants have had a chance to evaluate these assessments, with a view to selecting appropriate grades for inclusion in an expanded North Sea Dated basket at a later date. This will include necessary adjustments for quality and the deduction of freight costs to align the cif Rotterdam values gathered in this process with those of the current benchmark grades that usually trade on the basis of fob loadings from North Sea terminals.
“Argus is at the forefront of crude benchmark innovation and is developing an improved methodology that will sustain North Sea Dated into the future,” Argus chairman and chief executive, Adrian Binks said. “The launch of cif Rotterdam prices is the first step in this process.”
About Argus Media
Argus is an independent media organisation with almost 1,100 staff. It is headquartered in London and has 26 offices in the world’s principal commodity trading and production centres. Argus produces price assessments and analysis of international energy and other commodity markets and offers bespoke consulting services and industry-leading conferences.
Companies in 140 countries around the world use Argus data to index physical trade and as benchmarks in financial derivative markets as well as for analysis and planning purposes.
Argus was founded in 1970 and is a privately held UK-registered company. It is owned by employee shareholders, global growth equity firm General Atlantic and Hg, the specialist software and technology services investor.
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