Dated Brent above $100/b for first time since 2014, premiums surge

17 Feb 2022

Quantum Commodity Intelligence - Benchmark Dated Brent was assessed Wednesday at above $100/b for the first time since September 2014, as physical North Sea barrels continued to command huge premiums against underlying Brent swaps and futures.

The exact price was $100.795/b, up $3.14/b day on day, said price reporting agency (PRA) S&P Global Platts, which administers the London 1630 market-on-close Brent process, more commonly referred to as the 'window'.

Premiums for physical barrels remain at multi-year highs, with North Sea forties, a key component of the Dated Brent ‘basket’, assessed by Platts at a $3.29/b premium to the underlying Dated Brent swap, which is derived from Contracts for Difference market.

However, brokers said activity in the window has been thin this week with Wednesday seeing just a solitary offer for an Oseberg cargo at Dated +$3.70/b from Equinor.

On Monday Trafigura bid Forties at Dated +$3.30/b, Brent/Ninian at +$3.30/b and Ekofisk at Dated +$3.85/b.

Platts assessed the backwardation between Feb. 21-25 and March 21-25 Brent Contracts for Difference weeks at $3.50/b Feb. 16. This compares to a $2.38/b backwardation assessed Feb. 1, said Platts.

ICE published a price of $95.88/b on Feb. 16 for the London minute marker, which is a weighted average of the 429pm to 430pm trades.

Backwardation in the Brent futures market also remains at elevated levels

“The price gap between the first two contracts (1M vs. 2M) has widened to $2.4/b, the gap between the front-month contract and the contract due in six months (1M vs. 6M) is $8/b” said Commerzbank in a client note Thursday.

US WTI Midland crude oil will be reflected in the North Sea Dated Brent benchmark assessment from June 2023, Platts said in a statement Monday.

Supply from the five grades that underpin Dated Brent/Ninian – Brent, Osberg, Forties, Ekofisk, and Troll- will average around 775,000 bpd in March, up from 707,000 bpd in February, according to the scheduled loading programs.