Platts extends feedback period for proposal to amend Indonesia crude oil Market Parity Prices methodology

Platts, part of S&P Global Commodity Insights, is extending to April 5 the feedback period for its proposal to amend the methodology it uses to calculate the Market Parity Prices for Indonesia's Minas, Cinta and Widuri crude oil grades.

The proposed launch date of April 1 will also be revised to a later date, in line with the extended feedback period.

Platts first sought feedback on its proposal to amend the Indonesia crude oil MPP methodology in a subscriber note published Feb. 2:

(https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/020224-platts-proposes-amending-indonesia-crude-oil-market-parity-prices-methodology).

The initial feedback period ended Feb. 23.

Under the current proposal, the reference basket of relevant crude grades where MPP calculations for Minas, Cinta and Widuri are benchmarked to, would be amended to comprise Malaysia's Kimanis, Abu Dhabi's Murban, Angola's Cabinda and Dalia grades.

The values of Cabinda and Dalia would be calculated at the Asian market close (4:30 pm Singapore time) based on their last assessed values at the London close and accounting for the movement in the underlying Dated Brent benchmark at the prior trading day's European market close at 4:30 pm London time, until the Asian close.

Currently, the reference basket of relevant crude grades in the MPP calculations comprise Kimanis, Murban and Russia's ESPO Blend.

Platts is also proposing to amend the underlying delivery point for Minas, Cinta, Widuri and the four basket grades, to Singapore.

Under this proposal, Minas, Cinta, Widuri and the four basket grades would be normalized for delivery to Singapore, accounting for freight.

The underlying refined product prices used in the calculation of the Gross Product Worth values will be based on the regional benchmark Mean of Platts Singapore refined product prices as listed below, at the Asian market close.

Benchmark CFR North Asia propane, butane spot prices will be normalized to Singapore in the GPW calculations.

Currently, Minas, Cinta, Widuri, the three basket grades and their GPWs are normalized for delivery to Japan, accounting for freight and regional spot product prices.

The proposed change would better reflect the recent flow of Minas, Cinta and Widuri crude that is observed to be mainly processed by Southeast Asian refineries.

Platts will continue to report on any spot market transactions for the three grades, but this information would not be used in the daily calculation of the MPP.

Platts MPPs provide a calculation of the equivalent market value of a given crude based on the value of its typical refined product yield, subtracting costs for transport and the refining process, and adjusting the resulting value based on the trading levels of comparison crudes relative to their product yield values.

The MPP model will ensure that the assessments capture both the inherent refining value of the crude as well as the broader oil market demand-supply fundamentals reflected in the price of the reference basket.

More details on Platts MPP models and methodology are available at https://bit.ly/33GZehH.

Platts will continue to review the MPP models for Minas, Cinta and Widuri to ensure they continue to reflect prevailing market conditions and quality of the crude grades.

The Minas, Cinta and Widuri MPP assessments are published in Platts Crude Oil Marketwire, Platts Oilgram Price Report and on Platts Global Alert and Platts Crude Oil Alert pages 1250, 1805, 2210, 2211, 2216, 2217, 2244, 2245, 2264, 2265, 2280, 2281, 2811 under the following price database codes:

Please send all feedback, comments or questions to Asia_Crude@spglobal.com and pricegroup@spglobal.com by April 5.

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.