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Nigeria’s four largest crude oil grades now live on InterContinental Exchange swaps

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Trading at the first day of InterContinental Exchange (ICE) market which opened on Monday, September 17, 2018 has shown that Nigeria’s four largest crude oil grades made up of Bonny Light, Forcados, Qua Iboe and Bonga started on a nice footing at the swap deals.
Business Hilights gathered that the cash-settled future is based on a daily assessment by pricing agency S&P Global Platts for a “WAF index” backed by the four grades, each of which will carry a weighting of 25 percent, according to a note on the ICE website.
Details sourced at ICE website on Monday revealed that the contract will be based on the differential of the four crudes to the dated Brent benchmark price and will represent 1,000 barrels of oil.
Dated Brent is currently underpinned by five North Sea crudes –Brent itself, Forties,Oseberg, Ekofisk and Troll. That quintet together accounts for less than 1 percent of the roughly 99 million barrels per day of global oil production.
However, key traders such as Vitol Chief Executive, Ian Taylor and Royal Dutch Shell’s former head of crude trading Mike Mueller have been among those to express concern about the long-term decline in North Sea production and its impact on the liquidity of the market that sets the price of dated Brent.
S&P Global Platts, in response to concern from the industry over liquidity, added the Troll grade to the basket in January 2018.
Taylor, who heads of the world’s largest oil trader, has said the Brent benchmark should be broadened to include grades from West Africa, Kazakhstan and Algeria, with the possible inclusion of Russia and even the United States.
He added further that “As an industry we have a major problem that we have to solve,” he told an IP Week industry conference in 2014.

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