LLS the key global benchmark: Societe Generale

OREANDA-NEWS. June 09, 2015. Light Louisiana Sweet (LLS) has become the key world benchmark, vaulting over West Texas Intermediate (WTI) and Brent to take that status, according to a new analysis by investment bank Societe Generale.

"Statistically speaking, in recent months LLS appears to be providing more information to the global markets than both WTI and Brent," the bank's analysts wrote in a note issued to clients. "With US light sweet shale oil as the new de-facto swing supply source, LLS, the US Gulf Coast light sweet marker, reflects the refining region where the most shale oil is consumed. It also reflects the relative fundamentals of the USGC and the Atlantic Basin."

Since 2013 and particularly in recent months since last year's OPEC meeting, where producing countries declined to pull back on output, WTI and LLS have risen to prominence as the most significant price discovery benchmarks, the analysts said.

Brent has become less significant in price discovery in global oil markets, and Dubai "has been, and currently is, irrelevant in global price discovery."