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WTI Midland to Assume Key Role in Dated Brent Price

OIL

The inclusion of WTI Midland crude in the Dated Brent oil price assessment from June is set to assume a key role in the benchmark according to Reuters. Midland has been added due to the long term decline in supply of the five North Sea crudes.

  • The WTI-Brent spread narrowed from around -6$/bbl in March to above -4$/bbl as the forward contract rolled into June. The spread has closed to around -3.4$/bbl today.
  • Brent is used to price over three-quarters of the world's traded oil and could be more influenced by US fundamentals such as SPR releases and Permian production.
  • Crude deliveries from US WTI Midland to Europe have increased to replace missing Russian crude according to Kpler data. In March, WTI Midland exports to Europe at 1.25mbpd were greater than the other five dated Brent grades combined.
  • Dated Brent is set by the cheapest of the crudes in the basket. If WTI Midland had been a part of the Brent benchmark in 2021, it would have set the price about 68% of the time according to Argus.
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