Platts launches WTI Midland FOB USGC assessments by monthly decade basis

Platts, a part of S&P Global Commodity Insights, has launched assessments on a monthly-decade basis for WTI Midland crude oil cargoes loading on an FOB basis out of the US Gulf Coast, effective July 5, 2023.

The prices are published as differentials to the Platts assessment of the first month WTI at the Magellan East Houston Terminal (WTI MEH) and the relevant underlying value of Dated Brent and ICE Brent at the US close for the loading period. Platts publishes the outright values of the three decades as well as a single outright value representing the average of the three decades.

TIMING AND BASIS

The prices reflect values for cargoes loaded within three segments of each calendar month: first decade: 1-10 of a month; second decade: 11-20 of a month; and third decade: 21-end of the month. The assessment month aligns with the US Gulf Coast pipeline schedule and rolls to the new months assessment the first business day following the 25th of each month. For example, from Jan. 26 to Feb. 25 the prompt month for US domestic pipeline barrels is March. During this time Platts would be publishing values for the first, second and third decades of March loadings, and they would be published against the March WTI MEH pipeline assessment and the March Dated Brent basis. On Feb. 26, the prompt month for US domestic pipeline barrels shifts to April, and Platts assessments would roll to publishing first, second and third decades for April loadings against the April WTI MEH pipeline assessment and the April Dated Brent basis. The Dated Brent basis is formed using the relevant underlying prompt-month ICE Brent futures settle at the US close with the relevant Platts assessment of the Brent DFL financial differential at the time of loading. Dated Brent-related differentials reflect values relative to the value of Dated Brent that prevails at the time of loading. For example, on Feb. 1 Platts would be publishing the first, second and third decade assessments for March. The prompt ICE Brent futures contract for March loadings would be May, so the Dated Brent basis would be formed using the May ICE Brent settle with the March DFL differential. The ICE Brent basis reflects the value of the relevant contract month price of ICE Brent futures settles at the US close.

Specifications

The new assessments of WTI FOB values by domestic pipeline trade-month decades reflects the established specifications from the Platts WTI Midland FOB USGC assessment. The assessments, therefore, reflect the value for an Aframax cargo of Platts WTI Midland-spec crude on an FOB basis loading from locations along the US Gulf Coast, including Corpus Christi, Texas City, Houston, Beaumont, Nederland, and Port Arthur. The most competitive location, on a cargo-size normalized adjusted basis, will inform the value for the WTI FOB USGC assessment. The assessments reflect a typical volume of 700,000 barrels. Bids, offers, and trades that are smaller or larger than the cargo-size typical may be normalized to reflect the freight economics of the typical cargo size using that day's US to UK Aframax freight assessment (Platts symbol: TDUCF00). The assessments reflect WTI Midland crude supplied directly from the Permian Basin on one or more of the following designated pipelines: BridgeTex, Longhorn, Midland-to-Echo I/ II, Cactus I/II/III, EPIC, Gray Oak, Permian Express, and Wink-to-Webster.

Crude reflected in this assessment must meet Platts' comprehensive, globally-accepted WTI Midland specifications, which can be found here: https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/080320-platts-to-implement-comprehensive-platts-wti-midland-specifications.

Additionally, the assessments reflect value loading from terminals that have been approved by Platts for loading WTI Midland crude oil into its Dated Brent and Cash BFOE Market on Close assessment process. Loadings from non-approved terminals may be considered in the assessment, but normalized if appropriate.

Platts will continue to assess WTI Midland FOB USGC loading 15-to-45-days forward on an FOB basis. Please send any feedback or questions to americas_crude@spglobal.com and pricegroup@spglobal.com. For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request.