Platts Announces Quality Premiums for North Sea Benchmark Crudes

Platts, the oil pricing agency, announced the first quality premiums for two of the four North Sea crudes that form Dated Brent, the benchmark used to price more than half the world’s oil.

As of June 1, buyers will pay a premium 88.06 cents a barrel for Ekofisk grade and 98.05 cents for Oseberg to sellers on trades carried out during Platts so-called “window,” the company said today in a note on its website. The changes are designed to take into account their superior quality over the other two grades, Forties and Brent, that make up Dated Brent.

These are the first quality premiums, or escalators, to be published since the agency, which is a unit of McGraw-Hill Cos., said in March that it was introducing them to increase liquidity in Dated Brent trades at a time of falling North Sea production. Royal Dutch Shell Plc (RDSA), which was the first company to initiate such amendments, also changed its SUKO-90 contract to mirror the Platts formula. SUKO-90 has since 1990 acted as an industry standard for the trading of all four grades.

Forties, which is the most abundant and cheapest of the four grades and typically determines the benchmark price, is subject to a de-escalator. This reduces its price depending on the sulfur content of the grade. Sellers currently have to pay 25 cents a barrel for every 0.1 percentage point of sulfur on Forties with more than 0.6 percent sulfur.

To contact the reporter on this story: Rupert Rowling in London at rrowling@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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