SUBSCRIBER NOTE: Platts launches Fujairah ex-wharf 380 CST fuel oil assessments Apr 3

Following an extended period of discussion with the industry, S&P Global Platts has launched Fujairah ex-wharf 380 CST fuel oil assessments on April 3, 2017.

Under the assessment methodology, Platts ex-wharf 380 CST Fujairah assessments will reflect spot trading activity in 5,000 mt parcels of 380 CST fuel oil for lifting five to 15 days from the date of publication. Platts will consider bids, offers and trades for volumes between 2,000 mt and up to a maximum of 7,000 mt in this new assessment, with values normalized to 5,000 mt where needed.

The assessments will reflect trading activity up to 4:30 pm Singapore time or 12:30 pm Fujairah time.

FUEL SPECIFICATIONS: Fuel quality generally conforming with that of RMG 380 CST will be reflected in the assessment. Sellers are expected to supply material that is merchantable.

LAYCAN: Buyers/sellers can specify a loading laycan of three days within the assessment period of 5-15 days at the time of submitting bids or offers for publication in the assessment process.

LOADINGS: Parcels may be delivered via inter-tank transfers where possible, or to the buyer's nominated vessel/barge from an onshore terminal or offshore vessel within the port limits of Fujairah.

NOMINATION: Buyers would be expected to nominate the barge/vessel between two to five working days in advance of the load date as per standard industry practice. The sellers would need to notify the buyer of barge acceptance promptly and within a reasonable time. The acceptance would be subject to terminal availability.

PRICING BASIS: The new ex-wharf assessment will be published on an outright basis and a floating price basis. The floating price will be a differential against Platts forward Mean of Platts Arab Gulf 180 CST high sulfur fuel oil.

DERIVATIVES: Alongside the physical assessments, Platts will also publish MOPAG derivatives values for balance month and two forward months 180 CST fuel oil. These derivatives settle on the average of Platts netback outright values, known as MOPAG.

Platts will also publish a forward strip value representing a 5-15 days' forward MOPAG settlement. The strip value published by Platts in certain oil markets represents the value the market assigns to future Platts assessments, through trading in physical or derivatives instruments on strip-related prices. This value is determined by analyzing the derivatives market.

Platts will assess derivatives values based on trades seen in the Platts MOC process or on derivatives exchanges or heard in over-the-counter markets. In the absence of any trades, Platts will assess the value of MOPAG derivatives taking into consideration the respective Singapore derivatives coupled with freight netback and forward freight agreement values.

The new assessments are as follows:

Assessment Code

FO 180 CST FOB Arab Gulf Swap Balmo AAYBM00 FO 180 CST FOB Arab Gulf Swap Mo01 AAYBM01 FO 180 CST FOB Arab Gulf Swap Mo02 AAYBM02 Ex-wharf Fujairah strip AAYBD00 FO 380 CST Ex-wharf Fujairah AAYBF00 Ex-wharf Fujairah 380 CST vs MOPAG 180 CST strip AAYBG00

BACKGROUND: Fujairah's position as the region's top bunkering port has been further cemented by the addition of large commercial oil storage capacity and emergence of a multitude of suppliers in recent years.

The new ex-wharf assessment will complement the delivered bunker fuel price assessments that Platts already publishes in Fujairah. In October 2016, Platts also began publishing independent price assessments for a range of refined oil products, including fuel oil, in the Middle East on a free-on-board Fujairah basis.

Please send all further comments, feedback and questions to asia_products@spglobal.com and pricegroup@spglobal.com.

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