Over 100 WTI Midland cargoes delivered via Dated Brent window – S&P Global
Quantum Commodity Intelligence – WTI Midland has cemented its position as a key component of the Dated Brent market, with more than 100 cargoes of the US export grade nominated via the Platts Market-on-Close (MOC) since its inclusion last June.
According to data published by S&P Global, the parent company of Platts, a total of 104 cargoes of WTI Midland have been transacted in the Dated Brent MOC process, tracking the period from May 2023 when the grade first came into the picture ahead of the June introduction.
According to trading sources, WTI Midland has become the single most important grade in the Dated Brent mechanism, setting the Dated price more than 50% of the time in the first seven months of inclusion.
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," states the Platts methodology document.
The BFOE (Brent) cash price is the equivalent of ICE Brent futures plus the EFP value. When ICE Brent futures expire, prices converge with the physical Brent market through the ICE Brent Expiry Index, which represents the average price of BFOE in the physical market for the relevant delivery month.
Record
The S&P Global report noted that a record 18 cargoes of WTI Midland were nominated in February, topping the previous high of 17 trades recorded in July 2023.
The report further noted that Saudi Aramco and Azerbaijan's SOCAR both sold cargoes in the MOC for the first time since WTI Midland's inclusion during February.
WTI Midland buys and sells were, however, dominated by 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.
Shell has featured just once, taking WTI delivery in December, while other participants include Phillips 66 making delivery of seven cargoes and Equinor has received three cargoes.
PetroIneos has been on both the buy and sell side on two occasions, while ExxonMobil and ENI have nominated one cargo. Occidental has received a single WTI Midland cargo.
Enbridge Ingleside, Plains Eagle Ford, Seabrook LBC, Enterprise Houston, Buckeye TX Hub, Buckeye STG, Pin Oak, Energy Transfer Houston, Seaway TX City, EPIC, EHSC, NuStar North Beach and FHR were all listed as US Gulf terminals where WTI Midland cargoes have been loaded from.
Platts said it has monitored performance on 83 WTI Midland CIF Rotterdam trades published in the Platts Dated Brent MOC process from May 2023 through January 2024, of which two were booked out, while all others were physically delivered.
