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India’s Reliance Industries Ltd., owner of the world’s largest oil refinery, joined a growing army of firms trading crude that underpins the market’s most important price benchmark, the latest sign of how the measure has been transformed by an infusion of US supply.
The Mumbai-based company offered to sell 700,000 barrels of
WTI Midland crude for May 29-June 2 delivery to Rotterdam at a premium of $1.50
to Dated Brent, according to traders monitoring a pricing window organized by
S&P Global Commodity Insights, better known as Platts.
It was Reliance’s first participation in the 30-minute
trading window that determines the Dated Brent price, which in turn influences
physical oil-market transactions the world over — along with a web of
associated derivatives. It gave notice about a month ago that it might take
part.
Platts began accepting WTI Midland as a grade that could set
Dated Brent back a year ago, eliminating anxieties about a years-long loss of
physical North Sea crude that had previously underpinned the measure. WTI
Midland is sent by pipeline from deposits in western Texas to waiting tankers
in the Gulf of Mexico, which then deliver the barrels to Europe and elsewhere.
The inclusion WTI within Dated Brent dramatically boosted
the number of firms involved in helping to set the benchmark.
Koch Industries Inc., which had been absent for much of the
past decade, returned to North Sea market just a few days after the US grade
was added. Units of Saudi Aramco, Mitsui & Co. Ltd., Macquarie Group Ltd,
Repsol SA, as well as Azerbaijan’s state-run Socar all bought or sold Dated
Brent cargoes since the addition of WTI Midland.
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