Platts launches new Indian crude market parity prices

S&P Global Platts has launched market parity prices for three Indian crude oil grades on April 1, 2020, to meet the industry's requirement for price references of crude oil grades that are produced and refined within the country.

From April 1, Platts publishes daily MPP for Cambay, Ravva and Rajasthan grades as well as monthly averages for each of the grades.

Platts first announced plans to launch the MPP assessments in a subscriber note published March 24, 2020: http://plts.co/tP8330qscty

Light, sweet Cambay is produced in the western Indian state of Gujarat and has an API of 43.80 degrees and sulfur of 0.035% by weight. Ravva, a medium, sweet grade with API of 36 degrees and sulfur of 0.066% by weight, is produced from the Krishna Godavari Basin off the Indian east coast state of Andhra Pradesh. Rajasthan crude produced in India's western state of the same name is a medium-heavy and waxy, sweet crude with API of 29.50 degrees and sulfur of 0.086% by weight.

The MPP calculation for each grade is based on the its Gross Product Worth benchmarked to a reference basket of relevant crude grades that are actively traded in the regional spot market.

These initially include Nigeria's Qua Iboe, Angola's Cabinda and Dalia crude grades and Malaysia's Kimanis crude. The values of Qua Iboe, Cabinda and Dalia are calculated at the Asian market close (16:30 hours Singapore time) based on their last assessed values at London close and accounting for the movement in the underlying Dated Brent benchmark at the prior trading day's European market close at 16:30 hours London time, until Asian close.

The four basket grades, Cambay, Ravva and Rajasthan and their respective GPWs are normalized to West Coast India, accounting for freight and regional benchmark Mean of Platts Arab Gulf gasoline, naphtha, gasoil and jet kerosene, FOB Fujairah Marine Fuel 0.5% and FOB Arab Gulf propane, butane spot prices at the Asian market close.

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.

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

The MPP model, which Platts also uses to assess certain illiquid crude oil grades from West Africa as well as Indonesian Minas crude, ensures that the assessment captures 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.

Platts will review the MPP models for Cambay, Ravva and Rajasthan annually to ensure they continue to reflect prevailing market conditions and quality of the crude grades.

The daily MPP and monthly averages for the three grades are published in the Platts price database and on Platts Global Alert pages 2280 and 2281 under the following codes:

Please send all comments or questions to Asia_Crude@spglobal.com and pricegroup@spglobal.com.

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