Platts plans oil grade additions to Middle East benchmark

Platts has said it was planning to add two new crude oil grades to its Middle Eastern benchmark from January to meet demand for deliverable cargoes.

The provider of global prices and information on commodities and metals is adding Qatar’s Al Shaheen and Abu Dhabi’s Murban to its Dubai price reference.

The Dubai assessment is the main benchmark used to price Middle East crude shipped to Asia, the main consumer of oil from the region.

“We are adding these two grades of crude to the benchmark to ensure there are sufficient cargoes that can be delivered into the benchmark during times of high liquidity in the market place,” said Dave Ernsberger, the global editorial director of oil at Platts, a unit of McGraw Hill Companies in New York.

Currently, Platts’ Dubai assessment, which is based on trades conducted during a 30-minute window each day, is calculated from the value of three crude grades – Dubai, Oman and Abu Dhabi’s Upper Zakum. Al Shaheen and Murban were chosen from a number of potential Middle East grades because of their specifications, which match those of Dubai and Oman. Murban is a high-quality crude and Platts is considering having a quality premium for it.

Introducing Al Shaheen and Murban to the Dubai basket could add 600,000 barrels to the 1.6 million barrels per day in freely tradable crude. Demand for spot Middle East crude has risen, partly because Chinese trading companies and refiners are buying up Middle East crudes.

Separately, Platts is still looking to add new grades to North Sea Brent, an international benchmark which is used to price two-thirds of global oil.

“At least in part one of the triggers for another crude in Brent would be production resuming a downward trend,” said Mr Ernsberger.

Brent is made up of four North Sea grades: Brent Blend, Forties Blend, Oseberg and Ekofisk crudes.

Platts is looking at crudes from West Africa to Central Asia to include in Brent, but has yet to shortlist its picks.

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