On Friday, two dominant oil price reporting companies individually projected novel United States crude benchmarks, as an effort to compete with the United States WTI (West Texas Intermediate) for future agreements.
Two leading oil price reporting agencies separately launched new US crude benchmarks on Friday, as part of an effort to rival the U.S. West Texas Intermediate futures contract.https://t.co/p1X5s9lXoe
— CNBC-TV18 (@CNBCTV18Live) June 26, 2020
The action is from Argus Media, and S&P Global Platts arrive as both agencies strive to get rid of the traditional landlocked structure, after two months United States crude stocks jumped into a negative position for the very first time in the history.
S&P Global Platts described that its upcoming benchmark for the United States would be known as AGS (American GulfCoast Select), which would reflect the worth of aquatic light sweet crude allotted form the Permian Basin in New Mexico and in West Texas on primary pipelines to the Gulf.
Argus, the new daily crude price assessment, is even developed to reflect the emerging position of the United States Gulf Coast as a primary export center and to direct consistent market worries about the landlocked West Texas Intermediate crude benchmark.
Both oil price reporting agencies will adopt various methods for their novel respective price assessments.
On Friday afternoon, Brent crude, the international benchmark, stocks traded as 41.15 dollars per barrel, which is up nearly 0.3 percent. On the other side, United States West Texas Intermediate futures is at 38.63 dollars, which is down nearly 0.2 percent.
Brent benchmark priced on an island
Brent international benchmark rated on an island which is located in the North Sea and roughly five hundred meters away from the water, where the storage of tankers is possible. On the other side, the supply location for West Texas Intermediate is landlocked and five hundred miles away from the water at Oklahoma.
Goldman Sachs, an energy analyst, said that this contrast was assumed to have demonstrated a crucial point in late April when COVID-19 shock sent to the United States crude prices dropping.
Energy analyst even said that waterborne crudes such as Brent were more protected to face the pandemic because those waterborne crudes relatively easy contact to storage tankers than landlocked price marks like Russia, Canada, and the United States.
The Cushing, Oklahoma hub contains around two dozen pipelines’ network and fifteen storage terminals, reported by CME Group. Furthermore, the Cushing hub has ninety million barrels of oil storage capability and is sometimes known as The Pipeline-Crossroads of the World.
The global director of the oil at S&P Global Platts, Vera Blei, said that AGS would take the United States market ‘Brent of its own.’