Dated Brent, BFOE, CFDs post record volumes in April - S&P Global

Quantum Commodity Intelligence – Deliveries of physical crude in the Platts Market-on-Close (MOC) Dated Brent window set a new record in April while underlying volumes of related Dated instruments have also increased sharply over the past year.

Marking the first anniversary of WTI Midland being added as an alternative-delivery grade, S&P Global, the parent company of Platts, said that trade in forward cash partials (BFOE) had risen to a monthly average of 24.9 million barrels since May 2023, compared to 22.3 million barrels for the previous period.

The statement also noted that Brent CFD swaps volume has risen to a monthly average of 15.9 million barrels in April versus 11.3 million barrels in April 2023.

"In each case, April 2024 broke records, with physical cargoes trading 24.5 million barrels, cash BFOE 50.7 million barrels and CFDs 26.1 million barrels," said the S&P announcement.

Since the inclusion of WTI Midland, 214 cargoes (149.8 million barrels) of physical crude in the Brent complex have traded in the MOC window, including 138 cargoes of 700,000-barrel shipments of WTI Midland.

During the same period last year and prior to the Midland inclusion, 87 cargoes were traded in the MOC.

WTI Midland was added at the beginning of May 2023, and nominations of the US export grade started for June loading dates.

MOC

Trading sources said long-term MOC stalwarts, including majors such as BP, Totsa and Unipec, along with oil trading giants such as Vitol, Trafigura, Glencore, Mercuria and Gunvor, have been the primary traders in the physical window since the WTI inclusion.

But newcomers or long-term absentees have also featured in the MOC, including Mitsui, SOCAR, Aramco, Koch, Phillips66 and Occidental, while India's Reliance is the latest addition, marking its debut this week.  

Physical cargoes are delivered via the BFOE partials mechanism, with a cargo nominated when the same two counterparties transact 700,000 barrels, which in turn are traded in typical lot sizes of 100,000 barrels. Prior to the WTI addition, convergence came on 600,000 barrels.

"Platts assesses and publishes three forward Cash BFOE contracts. In its assessments, Platts considers Cash BFOE bids, offers and trades where the buyer is willing to accept the nomination of Brent, Forties, Oseberg, Ekofisk or Troll crude loading in the North Sea, or WTI Midland on a CIF Rotterdam basis," states the Platts methodology document.