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New Benchmarks for US Light/Sweet Crude Oil [S&P Platts AGS, Argus AGS]

US light/sweet crude WTI/WTIC sufferes from the problems created by landlock at Cushing, OK and limited local storage capacity for physical settlements. WTI May 2020 went deeply negative due to there features.

Now 2 new benchmarks are being launched for US light/sweet crude that is shipping-ready [called AGS - American GulfCoast Select]. It pricing will be in global oil markets and it won't be affected by landlock + local physical storage issues for WTI/WTIC. It is unclear from the news if these new contracts [S&P Platts AGS, Argus AGS] will have physical delivery or have financial settlements [like Brent].

https://www.cnbc.com/2020/06/26/oil-prices-sp-argus-launch-new-us-crude-benchmarks-to-rival-wti.html

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  • S&P Global Platts said its new benchmark for U.S. crude, called Platts American GulfCoast Select (AGS), would reflect the value of waterborne light sweet crude supplied from the Permian Basin in west Texas and New Mexico on major pipelines to the Gulf.
  • Argus’ new outright daily crude price assessment, Argus AGS, is also designed to reflect the growing importance of the U.S. Gulf Coast as a major export hub and to address ongoing market concerns about the landlocked WTI crude benchmark.
  • The agencies will use different methodologies for their new respective price assessments.

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