Singapore: Energy pricing agency Platts started publishing Dated Brent-related differentials for all its Asian sweet crudes since on Tuesday, a company official said, amid scepticism from the trading community.
This will be the first time that all Asia-Pacific grades are assessed against a far-away European crude bellwether, moving away from Malaysian light sweet benchmark Tapis, or heavy sweet benchmarks Indonesian Minas and Duri crudes.
The new assessments reflect the growing use of Dated Brent for pricing in Asia as output for local bellwethers declines, Dave Ernsberger, Platts editorial director for Asia, said.
"We see some regional crudes being priced off Brent and are trying to respond to what we see as a slow migration to Brent. We are just beginning a long process," Ernsberger said.
The differential to Dated Brent will be the difference between Platts' Asian Dated Brent assessment at 0830 GMT and the price of the regional grade as assessed according Platts' existing methodology.
Platts, a unit of McGraw-Hill Cos, is a leader in oil and products pricing in most physical oil markets.
The use of Asia Dated Brent assessment in pricing would give the agency bigger clout in the regional market.
In Asia, Platts' Indonesian crude assessments account for 50 per cent of the Indonesia Crude Prices (ICP), while its Minas crude assessments are used for 50 per cent of the price of most Vietnamese crude sales, for instance.
But large volumes of light sweet crudes remain priced off the Asia Petro-leum Price Index (APPI), which is set twice a week by a panel of producers, refiners and traders.
Traders have long complained about the low liquidity of Asian regional benchmarks, whose outputs have dwindled. Malaysian light sweet benchmark Tapis's production has fallen to around 200,000 barrels per day this year - with most of it being run by equity producers Exxonmobil and Petronas in their own refineries.
Output for Indonesian Minas is estimated to have fallen to 200,000 bpd.
