Reuters logo
UPDATE 1-New oil grades may be added to Brent benchmark from 2017-Platts
February 9, 2015 / 12:20 PM / 3 years ago

UPDATE 1-New oil grades may be added to Brent benchmark from 2017-Platts

(Adds comments from news conference)

LONDON, Feb 9 (Reuters) - New crude oil grades may have to be added to the North Sea Brent price benchmark earlier than previously thought, possibly from 2017, as lower oil prices cut investment in the region, an executive at pricing agency Platts said on Monday.

Lower output from fields that underpin the international Brent benchmark, which helps to price around two-thirds of global oil deals, has led to calls for additional supplies to be added to make sure it more accurately reflects global supply and demand.

Jorge Montepeque, Platts global editorial director, pricing group, told a news conference they had previously thought the earliest they would need to add new streams would be 2018-2020.

“Now we think the schedule will have to be earlier,” Montepeque said, adding they feared supplies from the North Sea would decline faster than previously anticipated following the near halving of crude oil prices since June, with firms less willing to invest in mature fields.

“We thought production would stabilise in 2014 but now with the oil price falling and with all the announcements of capex (capital expenditure) cuts it is likely to accelerate the production decline,” Montepeque said.

The addition of supplies from other oilfields or regions could strengthen the global benchmark, analysts say, and make it harder for any one party to influence the market.

The oil benchmark currently comprises four North Sea streams made up of Brent, Forties, Oseberg and Ekofisk crudes, known as BFOE.

Platts had previously said it was looking at adding Russian Urals or West African crudes to the Brent benchmark, though some in the oil industry have expressed concern about using supplies from countries targeted by Western sanctions or that suffer frequent supply disruptions.

Montepeque did not say which additional fields Platts was looking at adding to the Brent price assessment.

Platts, a unit of McGraw Hill, has lengthened the loading period of North Sea crude cargoes it uses in its dated Brent oil assessment as of Feb. 2.

Thomson Reuters, parent of Reuters news, competes with Platts in providing news and information to the oil market. (Reporting by Alex Lawler and Claire Milhench; Writing by David Sheppard; Editing by Dale Hudson and Jane Merriman)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below