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New price for crude export market launched

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World Pipelines,

A new physical price assessment for the fast-growing US crude export market was launched on 4 September. Global energy and commodity price reporting agency Argus is publishing a price for waterborne US crude exports – Argus WTI fob Houston – that bridges the gap between the US domestic pipeline market and international shipments to five continents. 

The Argus WTI Houston price, launched three years ago, is already the benchmark for much of the light sweet crude traded across North American pipeline networks. The new Argus WTI fob Houston price now adds transparency to the waterborne market. 

US crude exports climbed to a record 2.2 million bpd in June, more than doubling from an average of less than 1 million bpd in the first half of 2017, US government data show. More than 40% of US crude exports have reached Asia-Pacific destinations so far this year, and more than 30% of shipments have gone to Europe.

Unlike the US inland pipeline markets, pricing of export waterborne cargoes has generally been opaque, clouded by complexities around logistics and quality.

“The US export market has needed an independent source of pricing to value light sweet crude exports,” Argus Media Chairman and Chief Executive Adrian Binks said. “The new Argus WTI fob Houston price provides that solution for the oil trading community.”

The new price will introduce transparency to the export market for light sweet crude. It will complement established Argus benchmark indexes for pipeline WTI Houston and WTI Midland, both of which are used extensively in physical transactions and underpin actively traded futures contracts on the CME and Ice commodity exchanges.

The new price will be for cargoes of 500 000 – 650 000 bbl loading at marine terminals in the Houston area. Prices for other US export grades and locations will also be launched over the next year. These assessments will be for cargoes loading 15 - 45 days ahead and will be priced as a differential to the Nymex light sweet crude contract.

The new Argus WTI fob Houston export price will be available in the Argus Crude and Argus Americas Crude daily services.

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