Platts raises FOB Singapore RON 92 gasoline volume from Jan 2

Platts, part of S&P Global Commodity Insights, has updated the methodology of its FOB Singapore RON 92 gasoline assessment to reflect a minimum volume of 100,000 barrels and a maximum of 200,000 barrels, with effect from Jan. 2.

The decision follows a consultation process, which commenced in June and resulted in a subsequent proposal published Sept. 5 to raise the volume size reflected in the Platts FOB Singapore RON 92 gasoline assessment.

Details of the decision can be found in a subscriber note published Oct. 17.

Previously, Platts assessments for FOB Singapore RON 92, RON 95 and RON 97 gasoline reflected the value of cargoes of a minimum of 50,000 barrels and a maximum of 150,000 barrels each for loading 15-30 days forward from the date of publication.

The decision to raise the volume size reflected in the RON 92 gasoline assessment reflects feedback gathered during the consultation and aligns with changes to prevailing trading patterns in the region.

Platts understands that more regional gasoline buyers are now seeking larger clip sizes of 100,000 barrels or more of RON 92 gasoline on an FOB Singapore, Malaysia and Indonesia basis. Rising freight costs due to higher rates for coastal tankers and an aging coastal tanker fleet for gasoline mean that the marginal clip size in the market is no longer reflecting 50,000 barrels for the lowest RON gasoline grade.

Volume size reflected for RON 95, RON 97 to remain unchanged

Based on market feedback gathered through the consultation and proposal, Platts understands that a significant proportion of disports in the region continue to import 50,000 barrels for a single loading on smaller coaster tankers for the higher-octane grades. As such, Platts will not, at this time, make any changes to the volume size reflected in its FOB Singapore RON 95 and RON 97 gasoline assessments, and they will continue to reflect a minimum of 50,000 barrels and a maximum of 150,000 barrels.

At the same time, Platts has received feedback highlighting the desirability to reflect the same standard volume across the three grades to allow the inter-RON spreads to reflect the value of octane as closely as possible. Platts will therefore consider clips of 100,000 barrels to take precedence in the assessment process for FOB Singapore RON 92, RON 95 and RON 97 gasoline in cases where a bid and offer might cross due to volume differences, effective Jan. 2.

Platts will continue to monitor and review typical trading volumes for the higher-octane grades in the FOB Singapore market.

The following FOB Singapore assessments, published in Asia-Pacific/Arab Gulf Market Scan and Platts Global Alert pages 2304 and 2310, are impacted by this change:

Guidelines for commensurate ships

Platts would like to remind participants that its guidelines for commensurate ships for FOB Straits gasoline loadings have been updated to coincide with the Jan. 2 shift to larger gasoline clips of a minimum of 100,000 barrels for RON 92.

More details can be found here: Platts to update FOB Straits gasoline guidelines for commensurate vessels.

Changes to eWindow instruments from Jan 2

As part of the changes to the gasoline clip size, Platts has launched new eWindow instruments for 200,000-barrel cargoes in its FOB Singapore RON 92 Platts Market on Close assessment process for publication directly via the eWindow communication tool, effective Jan. 2. Platts has also discontinued eWindow instruments for 50,000-barrel cargoes in the RON 92 MOC on the same date. These changes will not impact existing eWindow instruments in the FOB Singapore RON 95 and RON 97 MOC.

Also, starting Jan. 2, market participants will be able to submit bids and offers on an FOB Indonesia basis for RON 92 cargoes of 100,000 barrels, 150,000 barrels and 200,000 barrels, and for RON 95 and RON 97 cargoes of 50,000 barrels, 100,000 barrels and 150,000 barrels for publication directly via the eWindow communication tool, or do so through an editor who will then publish the information using the software.

Platts has established clearly defined timing guidelines and incrementability standards that apply when publishing bids and offers in the MOC in order to ensure an orderly and transparent price assessment process. Platts guidelines can be found here: /content/dam/spglobal/ci/en/documents/platts/en/our-methodology/methodology-specifications/oil-timing-increment-guidelines.pdf.

Full details of the current gasoline assessment methodology can be found at http://plts.co/N5hJ30qCT0D.

Please send all feedback and comments to asia_products@spglobal.com and PriceGroup@spglobal.com.

For written comments, please provide a clear indication if they are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make those not marked as confidential available upon request.