LONDON, Sept. 16, 2011 /PRNewswire/ -- Platts, a leading global energy, petrochemicals and metals information provider and top source of benchmark price references, today announced that it will amend the date range reflected in its daily Platts Dated Brent price assessment to 10-25 days forward, instead of the current 10-21 days forward. This change, which is intended to ensure the continued integrity of Dated Brent as a global price benchmark for crude oil, will become effective on January 6, 2012.
At the same time, Platts will only consider in its assessment of cash Brent those crudes where the cargoes are nominated 25 days in advance of loading, instead of the current 21 days.
"We believe these changes are necessary to maintain the quality of the Brent price assessment. Recent events in the market, including disruptions to the Forties pipeline system and shortfalls in cargo deliveries, show clearly that timely action is needed to maintain the strength of the physical benchmark," said Dan Tanz, vice president of editorial, Platts. "Four more delivery days will allow the assessment process to potentially capture more than 30% of additional supply."
Platts' decision was announced today in a subscriber note (http://platts.com/SubscriberNotesDetails/6483446) following a three-month formal comment period. Platts first publicly proposed a change in the date range at its Platts Crude Oil Technical Workshop in London on June 10, 2011, and subsequently requested feedback in a subscriber note issued on July 15.
During the comment period, Platts received substantial support for the move to a 10-25 days assessment period. Platts also received requests for coordination of such changes with other potential measures that could be taken in the futures and derivatives markets.
"We are pleased with the support shown by the industry for the move itself, though we recognize that there were a range of differing views on the timing," said Dave Ernsberger, Platts global director of oil. "As a price assessor, we have a responsibility to maintain strong processes that are effective in all market conditions. We recognize that no matter what decision we make, it is unlikely to satisfy every market participant."
This summer's comment period also indicated interest in other, longer-term changes to the Dated Brent assessment. "There was substantial industry support for a further move towards a 30-day nomination process for the physical Brent complex, which we will work toward possibly implementing in 2015 or 2016," said Jorge Montepeque, Platts global director of markets reporting. He also noted that Platts will soon begin discussions regarding the use of "escalators" for the lighter crude grades already included in the Brent assessment, and the inclusion of more grades of crude oil in the future.
The changes announced today are the latest in a series of adaptations Platts has made to maintain the integrity of the Dated Brent price assessment, which has long been recognized as a global benchmark against which other crude oils and commodities are compared. In 2002, Platts extended the date range reflected in the assessment to 21 days, and added Forties, Ekofisk and Oseberg to the crudes constituting the assessment. In 2007, it introduced de-escalators to improve the quality of the assessment.
For more information and background on the pending changes, Platts has posted a webinar on the proposed changes to its Dated Brent and cash Brent assessments on its website. The webinar is available for download at the following link: http://www.platts.com/Webinars.
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