Platts Adds Bakken Price Assessment in the Williston Basin to its Shale Offerings
New price marker to reflect expanding crude-by-rail market for Bakken
Complements Platts’ Bakken Assessments at Pipeline Injection Points
Houston - April 23, 2014
Platts today announced it has expanded its North American shale crude oil offering to include an assessment of value nearest the Bakken crude wellhead in the Williston Basin. The new price assessment captures the value of Bakken crude oil from the Bakken shale formation at the point where there is transportation flexibility– either by rail or pipeline.
On April 23, 2014, the first day of its publication, the Platts Bakken assessment was $91.93 per barrel. The Bakken formation is part of the Williston Basin of underground petroleum reserves and one of the most significant new sources of regional crude oil supply for refiners in the United States and Canada.
“Given the rapid growth in the transportation of crude oil by rail, the industry was in need of Bakken shale oil value at North Dakota terminals with the operational capability to move crude by rail or by rail/pipeline,” said Sharmilpal Kaur, Platts associate editorial director of North America oil markets. “We’re pleased to bring transparency to Bakken pricing nearest to the wellhead just as we are with pipeline interconnection points.”
The new assessment complements the nation’s first daily spot price assessments for Bakken shale crude oil, which were launched by Platts in May 2010 and reflect the value as injected into the pipelines at Clearbrook, Minnesota, and Guernsey, Wyoming. While pipeline is still a critical transportation method for moving Bakken to end-users, Bakken crude-by-rail has grown markedly since 2012.
The Platts Bakken assessment reflects the open market spot value of crude oil as delivered by truck or pipeline to North Dakota terminals for a specific delivery month. The new assessment captures the value of Bakken crude as close to the wellhead as possible, before the decision is made on using truck, rail and /or pipeline to deliver the crude to consumers outside the region.
“Some 70% of total Bakken production, at one million barrels per day, has moved by rail thus far in 2014,” said Suzanne Evans, Platts Americas price group senior manager. “But pipelines are sure to stay in play given that several projects are coming online by 2016. These dual developments call for price discovery at the point that allows for transportation flexibility and the largest base of Bakken supply.”
The Bakken formation spans North and South Dakota, Montana, Saskatchewan, Manitoba and Alberta.
Bakken crude oil assessed by Platts has a sulfur content of 0.2% sulfur or less and an American Petroleum Institute (API)* gravity of 42 or less, similar to the nature of North Dakota Light Sweet crude. The Bakken price assessments are underpinned by the highly structured, robust Platts Market-On-Close price assessment process that results in an end-of-trading-day value.
Platts’ Bakken and other crude oil assessments are published in Platts Market Data, Platts Crude Oil Marketwire, North American Crude and Products Scan, and Oilgram Price Report. Details of the methodology can be found here.
*API gravity is a measure of how heavy or light a grade of crude oil is compared to water.
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