SUBSCRIBER NOTE: Platts launches US 0.1%S bunker fuel assessments

Platts has launched new assessments for maximum 0.1% sulfur bunker fuel in Houston and New York with effect from Monday, January 5, 2015.

Feedback has strongly suggested that fuel supplied with new sulfur standards in mind is likely to more closely conform to standard RMG 380 specifications, with the low sulfur cap. Therefore, Platts assessments at both ports reflect bunker fuel that meets or is better than RMG 380, with a maximum sulfur content of 0.1%. The assessments is published in dollars per metric ton.

A new market for 0.1% sulfur bunkers is expected to emerge as the industry adapts to International Maritime Organization rules, effective on January 1, 2015, which limit the sulfur content for marine fuel used by ships within 200 miles of shore in the North American Emissions Control Area to 0.1%, down from a current maximum of 1%.

Several industry participants have announced their intention to sell a new bunker product to meet the tighter emissions rules.

There are many possible ways for companies to blend a new product to meet the 0.1% sulfur cap, and Platts expects the market to need some time to understand the behavior and value of these different blends.

As a result, during an initial transition period, the two new assessments are derived from a calculation based on the prices of their most typical components, low-sulfur straight run fuel oil and ultra-low sulfur heating oil, weighted to allow a blend of the two to meet the 0.1% sulfur limit.

For the 0.1% bunker fuel assessment in Houston, Platts will use the existing assessments for Straight Run LS Dlvd USGC vs WTI Mo01 (AALFS00), front month NYMEX WTI at 3:15 pm Eastern Time (NYCRM01) and ULS Heating Oil USGC Prompt Pipeline (AAXFD00).