Platts has launched a new price assessment that reflects the value of West Texas Intermediate Midland crude oil at the Magellan East Houston Terminal (MEH).
Known as Platts WTI MEH, the assessment is the latest in a suite of physical market price references designed to reflect crude oil spot market developments in the Houston area.
US crude oil markets are experiencing a surge in storage, terminal and crude oil pipelines, leading to the emergence of new trading centres and Platts says it is working with the industry to address the need for new and relevant price markers. The Platts WTI MEH assessment addresses industry requests for a new price marker for light, sweet crude oil in the US Gulf Coast, stemming from the increase in spot trading at the Magellan East Houston terminal.
The new assessment is built on the Platts Market-on-Close (MOC) methodology, based on the principle that price is a function of time. The MOC process in oil identifies bid, offer and transaction data by company and results in a time-sensitive, end-of-trading-day daily price assessment.
“In recent months we have seen a rapid increase in the volume of WTI Midland crude trading in Houston,” said Richard Swann, Platts editorial director of oil, Americas. “This market has matured to the point where it now clearly has its own fundamentals, well beyond those of traditional WTI, often more linked to supply, demand and storage developments in Cushing, Oklahoma. We believe Platts WTI MEH will serve as one of the most relevant price references for crude oil producers, refiners and traders.”