Vittol CEO to be added to BT Benchmark for WTI

Singapore (Reuters) – The world’s largest free oil trader, Vitol, said on Monday that the company would prefer the West Texas Medium (WTI) Midland in the North Sea to be included in the Brent standard, rather than Norway’s John Swordwood.

Vitol General Manager Russell Hardy spoke at the 20th Asia Oil and Gas Conference in Kula Lamur, Malaysia on June 24, 2019. REUTERS / Lai Seng Sin / Files

Brent Benchmark is used to sell more than half of the crude oil trade, which is crucial to the global oil system. Currently, the measurement is based on five levels of seawater – Arba, Brent, Osberg, Ecofisk and Troll, but these supplies are in a long-term decline.

Oil Ports Agency S&P Global Platforms said in July that the industry was focusing on two potential additives: Johan Sverdroff’s flour, high sulfur or sour grade, and low sulfur or sweet West Texas Medium WTI Midland.

“We see WTI as an excellent replacement for many of the current standards in the scale,” said Victor Hardy, chief executive of Victor.

“The corrected and Brent market is better served by expanding the sweet alternative than the sweet alternative,” he said, referring to the latter as “a slippery slope at Cinderella’s feet.”

We prefer WTI-related solutions.

Adding WTI alone sees more than 1.5 million barrels of raw materials in the latest Brent Benchmark, currently below 1 million BPD, according to a presentation on Monday at the Platts Dump Benchmark workshop. The combination of WTI and Johan Sverdrop pushes more than 2 million bpd supplies.

However, Joel Hanley, director of international oil and gas at Plates, said both levels present their own challenges.

Johan Sverdrou needs to remove sulfur during the sulfur comparison day because it is dense and has higher sulfur levels than other levels in the basket.

WTI Midland has a load to consider, as it takes 17 days to sail from the US Gulf coast to the North Sea.

Vendors must also give 30 days’ notice of which port and terminal to load, which could lead to further problems, he said.

“If there was a perfect standard, it would already be in place,” said Hanley. That is why there is so much interest in both classes, despite the individual challenges.

The market is booming in the future, thinking about how to include both, or even in some cases.

Report by Chen Isu and Florence Tan; Correction by Christson Donovan


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