Houston (Platts)--11Feb2011/507 pm EST/2207 GMT
WTI's historically weak discount to Brent and recent volatility within that spread have led some to consider using Dated Brent as a basis for South American crude spot transactions in the Americas, Latin American crude market sources said Friday. Buyers of Colombian Castilla Blend were heard seeking to buy volumes of that 18.8 API, 2% sulfur crude based on Dated Brent, said sources. "We are open to negotiations with whichever benchmark -- WTI, Brent or Dubai," said one seller of Castilla Blend, adding his company has received bids against Brent. On Friday, Brent was heard trading around $16.00/b above cash WTI. Crudes from South America have traditionally been sold off WTI to the US Gulf Coast. Market sources also said they have heard offers of Castilla Blend and other Latin American cargoes offered into the US Gulf Coast on a Brent-related basis. "I've seen some people recently trading Latin cargoes versus Dated Brent. WTI is too volatile," a market source said. "Before the record spreads, you could put a cargo offer out there versus WTI and adjust it a few times throughout the day. Now you have to refresh your offer every 20-30 minutes against WTI," said another Latin American crude market trader. When marketers sell to refiners, they might offer Dated Brent, but some of the refiners convert that offer into a WTI-related deal or number when the deal is confirmed, said market sources. Another South American crude market trader said when asked about Brent being used as a basis for spot crude offers into the US Gulf Coast, "It makes perfect sense. We have had discussions of pegging numbers of [Castilla Blend against] Mars or similar quotes too, but so far nothing done," said the source. --Richard Capuchino, richard_capuchino@platts.comSimilar stories appear in Oilgram News. See more information at http://bit.ly/OilgramNews