Dave Marino, http://oilblog.platts.com

The Basis for Long Dated Oil Futures Prices

The forward price of oil is not a prediction of where spot prices will be in five years, but the current price for oil to be delivered five years from now. Current prices are higher because tight supply/demand fundamentals for crude have placed a premium on prompt oil over oil for deferred delivery. Many factors set the price for long-dated oil -- expected production costs, economic growth predictions and interest rates, among others.

U.S. Crude Oil Benchmark Proves Understated

Your prices for crude are way off. As of Aug 1, nearby WTI futures were over $76/barrel, and more than $1/barrel above nearby Brent. At those prices, how is the US benchmark understated?

ICE and NYMEX Duke It Out For The (Sweet) Sour Crude Contract

There are already ways to hedge sweet vs. sour risk. Over-the-counter Brent-Dubai swaps are widely traded, and cleared on both ICE and NYMEX. There is also rising interest in Urals CFDs. However, a sour crude contract could bring in more of the purely financial players to the Dubai/Oman market and add liquidity.