Naming
We'll still call it "Brent" and "Dated Brent," but in fact "Dated Brent/Brent" will be "WTI 2" as of June 23, 2023.
The addition of WTI to Brent explains a lot of the recent Biden administration policy decisions regarding crude oil.
Updates
February 15, 2023: WTI - Brent update. This is a huge story. Link here. How big a deal is this? Former President George Bush will be attending the summit.
The inclusion of US benchmark crude WTI into the Brent complex draws closer, and the impact to that market is likely to be "huge" by boosting the physical volume into Europe's benchmark.
"It's really WTI setting this marginal price for light sweet crude in Europe," said Argus' vice-president of business development James Gooder today at the Argus Americas Crude Summit in Houston, Texas.
The market opted to include WTI, over Norwegian grade Johan Sverdrup, into Brent, but the light sweet US grade is poised to become the most important part of the crude basket. "It's more a case of WTI absorbing Brent," said Gooder. "Overtaking and subsuming Brent into itself."
Original Post
I hope RBN Energy does an encore presentation with regard to Dated Brent and how it will change on June 23, 2023 -- 6/23/23. I doubt that date was chosen randomly. 6/23/23.
RBN Energy had a two-part series on this subject last year; I archived the two blogs.
I'm too tired to discuss this tonight but will post the links so I can clear my in-box.
Perhaps, start here: US influence on global oil prices is growing, Irina Slav, February 16, 2023.
The "white paper" and how the decision was made. It came down to two finalists: Johan Sverdrup and WTI Midland (and one can substitute Bakken Light Sweet here).
Two articles, both of which might be behind a paywall:
- SPGlobal, June 8, 2022: Platt to include WTI Midland in Dated Brent, related assessments from June 2023; Nick Coleman, (look at the date; wow).
- Bloomberg, February 14, 2022: US crude to help set world's most vital oil price fromm 2023, Alex Longley and Sherry Su (look at the date; wow).
And here we go: the data points, from Quantum Commodity Intelligence, October 20, 2022:
S&P Global Commodity Insights (Platts) announced this week it will include six more locations as loading terminals for WTI Midland crude oil in its Dated Brent and Cash BFOE benchmarks, coming into effect for June 2023 deliveries.
The new additions are Energy Transfer Houston, Flint Hills Ingleside, Seabrook Logistics, Buckeye South Texas Gateway, Eagle Ford Terminals Corpus Christi and Pin Oak Corpus Christi.
Sellers will be able to nominate WTI Midland meeting Platts specification loaded from the additional terminals for inclusion into the Dated Brent/Cash BFOE assessment process.
The new terminals add more than 20 million barrels of storage capacity available for WTI Midland deliverable against the long-standing North Sea benchmark, taking the total to nearly 23 million barrels.
Platts previously announced last month the NuStar Corpus Christi, Texas North Beach terminal as the first loading storage site accepted for WTI Midland.
Platts said in June this year it would broaden the basket of Dated Brent grades to include the WTI Midland crude from June 2023.
”The decision marks a major milestone for the inclusion of US WTI Midland in the Brent complex, the first time a crude grade from outside of the North Sea will be reflected in the complex and the Dated Brent benchmark,” said S&P Global in a statement at the time.
The Intercontinental Exchange, which hosts the ICE Brent futures contract, announced in July it plans to include WTI Midland in calculations for its Brent Index from June 2023 and increase the cargo size to 700,000 barrels.
The following details are available for each loading terminal:
Energy Transfer Houston Terminal: Houston, Texas, is wholly owned by HFOTCO, LLC, a subsidiary of Energy Transfer LP. It handles crude oil and petroleum products. The terminal has 12 docks, including two that can load up to a Suezmax size vessel and 18.2 million barrels of storage capacity, 7 million barrels of which is for crude oil storage.
Seabrook Logistics Terminal: Seabrook, Texas, is partially owned by Magellan OLP, L.P. and LBC Bayport Terminal, LLC. It handles only crude oil. The terminal has two docks that can fit up to an Aframax-size vessel and 3.996 million barrels of storage capacity, about 3 million barrels of which is for WTI Midland storage.
Flint Hills Resources Ingleside: Corpus Christi, Texas, is wholly owned by Flint Hills Resources Ingleside, LLC, a subsidiary of Koch Industries, Inc. It handles only crude oil. The terminal has two docks, including one that can fit up to a Suezmax-size vessel and 3 million barrels of storage capacity.
Eagle Ford Terminals Corpus Christi: Corpus Christi, Texas, is partially owned by Plains Marketing L.P. and Enterprise Products Operating LLC. It handles only crude oil. The terminal has two docks, including one that can fit up to a Suezmax-size vessel and 1.260 million barrels of storage capacity.
Buckeye South Texas Gateway Terminal: Ingleside, Texas, is wholly owned by Buckeye South Texas Gateway Terminal, LLC, a joint venture between Buckeye Partners L.P., Phillips 66 Company, and Marathon Petroleum Company LP. It handles bulk storage and marine loading of crude oil. The terminal has two docks that can fit up to a VLCC-sized vessel and 8 million barrels of storage capacity, 3.2 million barrels of which is for WTI Midland crude oil storage.
Pin Oak Corpus Christi Terminal: Corpus Christi, Texas, is wholly owned by Pin Oak Group LLC. It handles crude oil and petroleum products. The terminal has two docks, including one that can fit up to a Suezmax size vessel and has a storage capacity of 5.1 million barrels, 2.9 million barrels of which is for crude oil storage.
NuStar Corpus Christi: Texas North Beach: NuStar Logistics LP wholly owns the terminal, which handles crude oil and petroleum products, including distillates, gasoline, xylene and toluene. The terminal has four docks, including two that can fit up to a Suezmax size vessel and 3.7 million barrels of crude storage capacity, 1.4 million barrels of which is for WTI Midland.
The maps:
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