With the exception of Clearbrook, Argus Bakken price assessments “roll” to the next month according to US pipeline scheduling. For example, the trade month for crude to be delivered in February 2023 ran from 27 December 2022 through 25 January. On 26 January, the prompt trade month “rolled” to trade for March-delivered barrels.
Unlike the rest of Argus Bakken assessments, the Clearbrook, Minnesota market “rolls” forward at the end of the Canadian trade month, which occurs on the day before Notice of Shipment (NOS) for barrels that will flow on the Enbridge pipeline system. Typically, the date for NOS is around the 16th of the month before shipment. Since Clearbrook is on the Enbridge pipeline system, our assessment there “rolls” on Enbridge pipeline timing.
The cumulative month-to-date (MTD) volume-weighted average (VWA)
As mentioned above, Argus publishes a cumulative MTD VWA price for Bakken DAPL, Bakken Patoka, and Light Sweet at Guernsey in the far right column of our Midcontinent price table. These prices reflect the calculated volume-weighted average (VWA) price of all trades done for that grade from the first day of the US pipeline trade month (usually the 26th of the month, two months before shipment) through the current day’s trade.
Source: Argus Americas Crude, 25 January 2023, p2
In the table above, which comes from the daily report on 25 January 2023, the volume-weighted average price of all Bakken DAPL trades done for February trade through the end of trade on 25 January equalled Nymex CMA + 0.86. Bakken Patoka = +1.16 and Light Sweet Guernsey = -0.14.
Two business days after the end of each trade month, Argus publishes a summary price table showing the Argus month-average price calculations for all physical US crude grades assessed by Argus (table shown above). For most of those grades, this month-average price reflects the arithmetic average of the Argus published daily assessments for that grade for each day of the trade month. This month-average calculation has been used for well over a decade in US Gulf coast markets, and many exchange-hosted financial contracts settle on those Argus month average prices.
But at the request of the industry, Argus also publishes a “Cumulative monthly VWA” for Bakken DAPL, Bakken Patoka, and Light Sweet at Guernsey. The illustration below shows an excerpt from the February trade month average price table, published on 27 January 2023. Looking at Bakken DAPL, for example, the first listed month-average price of +0.97000 is the arithmetic average of the Argus daily published price assessments for Bakken DAPL over the course of the February trade month. Days in which there were no Bakken DAPL trades are averaged into that number.
But directly below that number is the “Cumulative monthly VWA”. This number reflects the volume-weighted average of Bakken DAPL trades done and reported to Argus throughout the February trade month. The majority of participants in the DAPL, Patoka and Guernsey markets have indicated to Argus that they prefer to use this “Cumulative monthly VWA” number in their contracts. Additional features of the month average price table are shown in the charts below.
Argus believes that rolling the Bakken assessments (except at Clearbrook) in line with the US pipeline trade month allows our publication to capture more liquidity than indexes using only trade between the first business day of the month and Enbridge NOS. We also believe that publishing a “Cumulative monthly VWA” price at DAPL, Patoka and Guernsey allows us to reflect these markets as they trade – rather than dictating a price calculation that does not align with the most widely used price structures.
Which injection points are included in the Argus Bakken DAPL price assessment?
Bakken crude injection points for Dakota Access Pipeline (Bakken DAPL pricing points) include Johnson’s Corner, Epping, Ramberg, Stanley, Trenton and Watford City. Crude traded at these or other locations where crude can be injected into the DAPL line are included in the Argus volume-weighted assessment for Bakken DAPL. The DAPL tariff structure tends to cause trades at these locations to be done at parity to one another. Trades for Bakken crude staged for or loaded on rail cars, however, are not included in the Argus Bakken DAPL price calculation.
Argus Bakken DAPL pricing area
