Something Fishy Going On With Brent? -- Pricing Agency Platts Defers Changes To Dated Brent -- Industry Pushback -- Re-Posting As A Stand-Alone -- March 3, 2021

Added:

• pricing agency Platts defers changes to dated Brent due to industry pushback -- Reuters, March 10, 2021; archived;
  

Brent:

• Scotland considers a future without oil and gas -- FT; January 19, 2020. Archived.
  
• where would Brent be without WTI; something fishy going on. Bloomberg reports, archived;
• Platts to add US WTI crude to dated Brent benchmark; previously reported; February 22, 2021; Reuters;
• the U.S. crude will join the existing five British and Norwegian grades - Brent, Forties, Oseberg, Ekofisk and Troll - that make up the dated Brent basket, boosting the supply underpinning the benchmark used in oil trades around the world
• apparently that "decision" has been delayed by Platts -- Bloomberg: March 13, 2021
• US oil (WTI) to join North Sea crude price basket, previously reported; February 22, 2021 -- FT; archived; will include transportation costs to Rotterdam!
  
• same story, Bloomberg, December 3, 2020;
• noted at twitter -- how a hasty move to change the world's key oil price unraveled, March 13, 2021 -- Bloomberg;
• Bloomberg's story archived;

From the Bloomberg article:

How do you measure the value of the world’s most important commodity?

It’s a conundrum that brought uproar in the oil market over the past few weeks after S&P Global Platts, the company that publishes the world’s key crude price, announced on February 22, 2021, that it was going to radically change the very nature of that benchmark, known as Dated Brent.

Just nine days after announcing its ambitious overhaul, which had been meant to begin in June 2022, Platts was forced to apologize to the market for the suddenness of the move. A week later it went a step further: the changes would be shelved for an as-yet-undefined period.

“It is not surprising that it caused such an uproar in the market,” Adi Imsirovic, senior research fellow at the Oxford Institute for Energy Studies and an experienced oil trader, said in a paper on the reform. The proposal was “nothing short of revolutionary.”

And more:

While Platts may have hit pause on the plan, what the saga really highlighted was a more fundamental problem facing the global oil market. Volumes of Brent oil -- which gets its name from a Scottish oil field whose production peaked in the 1980s -- have slowed to a trickle. Platts widened what constituted ‘Brent’ to include four other grades -- Forties, Oseberg, Ekofisk and Troll -- but even those are slowly running out.

And then this:

With fewer barrels to trade, the decline poses a threat to the reliability and credibility of a measure that affects everything from crude oil transactions, to long-term refining and drilling contracts. Gas supply deals and a whole host of derivatives -- even Brent crude futures -- all rely to varying degrees on that one number, published every day some time after 4:30 p.m. in London.

Platts’s idea was radical: add American crude into the mix and base its flagship oil price assessment on the trading of delivered cargoes, a move that effectively adds the cost of shipping to the price. Until now they have been based on the prices of barrels as they are loaded.

Bottom line: a most incredible story. It's behind a paywall, but there may be ways for folks to get to the article, and it's very likely Rigzone will post the story next week. 

For me this was a most satisfying story on so many levels.