Platts launches East Texas CBOB, Premium CBOB assessments

S&P Global Platts has launched new calculated assessments reflecting East Texas CBOB and Premium CBOB gasoline, FOB Houston, with effect March 1, 2021.

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

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

The new assessments are:

These assessments will be published throughout the year and will reflect changes in RVP based on US Environmental Protection Agency regulation as well as market feedback on when the market transitions to different seasonal grades.

Below is the planned annual calendar for the East Texas market; any changes to this will be announced as soon as possible ahead of implementation. This schedule will also be made available on the Platts US gasoline RVP calendar, which is available here: https://www.spglobal.com/platts/PlattsContent/_assets/_files/en/our-methodology/methodology-specifications/us-gasoline-rvp-calendar.xlsx.

East Texas grade RVP after ethanol

Jan. 1-Mar. 15 14.5

Mar. 16-Apr. 15 12.5

Apr. 16-Oct. 1 7.8

Oct. 2-Oct. 31 12.5

Nov. 1- Dec. 31 14.5

The winter RVP (14.5 and 12.5 psi) values were modified from the decision note published Jan. 27, 2021, (13.5 and 11.5 psi) to reflect quality after ethanol blending. Additionally, the RVP calendar was modified based on further market feedback to reflect time needed to prepare regional inventory. The decision note can be found at:

https://www.spglobal.com/platts/es/our-methodology/subscriber-notes/012721-platts-to-launch-east-texas-cbob-premium-cbob-assessments-march-1.

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.

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

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