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March 15, 2013 /PRNewswire/ -- Platts, a leading global energy, petrochemicals and metals information provider and publisher of benchmark price references, today announced that it is enhancing the methodology for its
Dated Brent price assessment, as part of ongoing efforts to boost liquidity and ensure the long-term viability of one of the world's most important oil benchmarks.
Under its updated methodology, Platts will introduce Quality Premiums for Oseberg and Ekofisk crude oil delivered in its North Sea Dated Brent, cash Brent (BFOE*) and related assessment processes for cargoes loading from
June 2013 onwards. Quality Premiums are to be paid by buyer to seller for the nomination and delivery of Oseberg or Ekofisk into a physical BFOE transaction concluded during the Platts Market-on-Close assessment process.
"The introduction of Quality Premiums offers an incentive for more deliveries of Oseberg and Ekofisk, and thus has the potential to further gird the supply of oil underpinning the BFOE complex and the Dated Brent price assessment," said
Dave Ernsberger, Platts global editorial director, oil.
"Increasingly, much market attention is being put to the issue of new streams being blended into established benchmark grades," said
Jorge Montepeque, Platts global editorial director, market reporting. "As the trend of blending expands, as we believe it will, it becomes even more important that price assessment processes integrate the use of Quality Premiums and De-escalators to best account for slight, but not insignificant, variances in crude oil quality and best assure that assessments reflect true market value."
Today's announcement followed constructive dialogue with oil market participants during the
February 18 to March 10 formal comment period, preceded by more than 18 months of informal market consultation.
In its market engagement, Platts found widespread support for a mechanism that would support the more frequent delivery of higher quality crude oils being delivered into the benchmark. Dated Brent is used in spot and long-term contracts to value around 60% of the 90 million barrels of crude oil produced in global oil markets each day.