In 2018, a little more than two years after the US lifted its ban on the export of crude, Argus began publishing a daily dockside fob Aframax cargo price for Bakken crude. As with our WTI fob Houston price, Argus opted to publish daily differentials for Bakken fob trades versus CMA Nymex, spot physical WTI at Houston (MEH terminal), and 2-month-forward ICE Brent futures.
Source: Argus Americas Crude, 25 January 2023, p 5
Bakken spreads to ICE Brent and to onshore WTI Houston fluctuate in line with multiple factors. Bakken’s slightly better distillate yield as compared with WTI can cause US Gulf coast refiners to bid up its price locally, at the Nederland onshore terminal. This can limit the amount of Bakken available for export, supporting prices. But WTI is a far more familiar export grade.
The red line in the chart below shows that the spread between Bakken fob and ICE Brent futures is more volatile than its spread to WTI Houston. The international spread tends to be a function of transatlantic arbitrages, freight costs and other factors.
Bakken fob spreads
Conclusion
Argus daily price coverage of Bakken crude trades provides invaluable insight into location spreads and transport efficiency in North America. Bakken prices in the midcontinent reflect not only production levels in North Dakota, but also the availability of light sweet synthetic crude from Canada and the pull on Bakken barrels from the Atlantic and Pacific coasts. Bakken is also an established export grade at the Gulf coast, and the number of its available export locations is expanding with Energy Transfer’s completion of its Ted Collins pipeline to the Houston Ship Channel. Any comprehensive view of crude balances and prices in North America must include Bakken, and Argus is happy to continue expanding our coverage of the trade of Bakken crude across the US.
Contacts
For more information about Argus Bakken market coverage or any other crude market questions, please contact us at houstoncrude@argusmedia.com, or call us at 713-968-0000.
