Global oil market on price redistribution threshold

Pavel Borisovich Katyuha
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Pavel Borisovich Katyuha: Gubkin Russian State University of Oil and Gas (National Research University), Moscow, Russia

Russian Foreign Economic Journal, 2020, issue 2, 119-132

Abstract: By the mid-80s, a fundamentally new pricing structure was formed in the global oil market with three exchange centers ICE, NYMEX and DME, where the three main benchmarks Brent, WTI and Dubai / Oman are traded, to which all world grades of oil are tied using a differential. The decline in Brent crude oil production and lower liquidity of this benchmark caused increased competition between existing benchmarks and created the conditions for the appearance of a new benchmark that might change the structure of global oil pricing. The upcoming launch of the Murban marker grade oil on the new Dubai ICE Futures Abu Dhabi exchange, increased confrontation between the Brent and WTI benchmarks and the growing Russian liquidity marker Urals, are leading the world oil market to a price redistribution and transformation of the entire crude oil pricing system.

Keywords: World oil market; pricing structure; benchmarks; world exchanges; spot contracts; long-term agreements; derivatives market; traders; derivatives; futures; forwards. (search for similar items in EconPapers)
Date: 2020
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