New US Crude Oil Waterborne Benchmarks -- June 27, 2020

Re-posting: 

New oil quotes: Argus and S&P Global Platts will now add new crude oil benchmarks based on seven Gulf of Mexico waterborne locations:

• Magellan Midstream Partners' East Houston terminal
• EPD: three terminals
• Houston: waterborne
• Seabrook: waterborne
• Texas City: wateroborne

Link here.

S&P Global Platts said its new benchmark for U.S. crude, called Platts American GulfCoast Select (AGS), would reflect the value of waterborne light sweet crude supplied from the Permian Basin in west Texas and New Mexico on major pipelines to the Gulf.

Argus’ new outright daily crude price assessment, Argus AGS, is also designed to reflect the growing importance of the U.S. Gulf Coast as a major export hub and to address ongoing market concerns about the landlocked WTI crude benchmark.

Why now?

Brent is priced on an island in the North Sea roughly 500 meters from the water, where tanker storage is accessible. In contrast, the delivery location for WTI is landlocked and 500 miles from water at Cushing, Oklahoma.

This difference was thought to have illustrated an important point in late April as the coronavirus shock sent U.S. oil prices tumbling, energy analysts at Goldman Sachs said at the time.

They argued waterborne crudes, like Brent, were far more insulated to the pandemic because they had comparatively easy access to tanker storage than landlocked price grades — such as those in the U.S., Canada and Russia.

********************************* 

New To The Neighborhood