Platts to launch East Texas CBOB, Premium CBOB assessments March 1

Platts to launch East Texas CBOB, Premium CBOB assessments March 1

S&P Global Platts will publish two new calculated assessments reflecting East Texas CBOB and Premium CBOB gasoline, FOB Houston, effective March 1, 2021.

The assessments will be published throughout the year and will reflect changes in RVP based on US Environmental Protection Agency regulation as shown below.

East Texas grade RVP after ethanol

Jan 1-March 31 13.5

Apr 1 – Apr 30 11.5

May 1- Oct 1 7.8

Oct 2 – Dec 31 13.5

The new assessments will reflect 25,000 barrels of gasoline on an FOB Houston basis. East Texas CBOB will reflect 87 octane and East Texas Premium CBOB 93 octane, both after ethanol blending.

The decision follows a proposal published Dec. 22, 2020 to launch the two new assessments:

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Platts understands there is no liquid spot market for East Texas CBOB, particularly the summer 7.8 psi (after ethanol blending) specification. The assessments will, therefore, be calculated using the lowest fungible RVP Colonial Pipeline CBOB (AARQU00) and Premium CBOB (AARQV00) assessments, and a published RVP adjustment to account for the difference in RVP.

As of Jan. 4, 2021, Platts began publishing four year-round RVP adjustments: CBOB plus 1 psi, CBOB minus 1 psi, Premium CBOB plus 1 psi and Premium CBOB minus 1 psi. These adjustments will be used to calculate East Texas CBOB and Premium CBOB depending on how its specifications relate to fungible Colonial Pipeline CBOB at different points in the year.

To calculate a 7.8 psi (after ethanol blending) East Texas CBOB price on May 1, for example, Platts will use the following formula: Colonial CBOB + (CBOB minus 1 psi * (Colonial CBOB RVP – East Texas CBOB RVP)).

To calculate a 11.5 psi (after ethanol blending) East Texas CBOB price on April 30, for example, Platts will use the following formula: Colonial CBOB + (CBOB plus 1 psi * (Colonial CBOB RVP – East Texas CBOB RVP)).

The new assessments come after Platts discontinued the CBOB 87 USGC Pipeline Supplemental (AASOB00) and CBOB 93 USGC Pipeline Supplemental (AASOC00) assessments on Sept. 1, 2020. Platts understands that those previous assessments had provided useful information for the East Texas CBOB market. The new assessments will directly reflect that market but will not reflect pipeline product as they are not fungible Colonial Pipeline gasoline grades.

The East Texas area is not supplied by Colonial Pipeline, and is the last remaining 7.8 psi CBOB (after ethanol blending) region in the southern US. The area covers 95 counties where the summer restriction applies from May 1 through October 1 of each year. This area is typically supplied via Explorer and Plantation pipelines, among others.

The assessments will be published as outright prices and differentials to NYMEX RBOB in cents/gal. The differential will be relative to the same futures month as the prompt Colonial Pipeline CBOB assessment.

Please send further comments to americas_products@spglobal.com and pricegroup@spglobal.com.

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