Platts opens consultation on USAC residual fuel oil assessments

• Seeking feedback on 0.3%S HP, 0.3%S LP, 0.7%S, 1%S, 2.2%S and 3%S fuel oil assessments
• Considering amendments to specifications, laycans and terms
• Considering valuing some assessments as fixed differentials against key products

S&P Global Platts is opening a formal consultation on its suite of US Atlantic Coast residual fuel oil assessments and invites feedback on the specifications, timings and delivery terms they reflect.

Platts also invites feedback on which, if any, assessments should be discontinued, and whether some assessments should be valued as fixed differentials to other assessments.

In this consultation, Platts is inviting feedback on the specifications of the fuels it assesses on the US Atlantic Coast to better align the grades with the end-user markets for those fuels, and potentially establish pricing differentials between some specifications. In the event of an assessment being moved to reflect a fixed differential to another assessment, Platts would no longer publish bids, offers and trades for that grade in the assessment.

This consultation is specifically focused on the following six US Atlantic Coast fuel oil assessments:

PUAAE00: 0.3%S High Pour NYH CIF

PUAAB00: 0.3%S Low Pour NYH CIF

PUAAH00: 0.7%S NYH CIF

PUAAO00: 1%S NYH CIF

PUAAU00: 2.2%S NYH CIF

PUAAX00: 3%S NYH CIF

Separate from this consultation, Platts is proposing to discontinue the NYH 1%S FOB, 2.2%S Boston and RMG 380 FOB NYH assessments, with effect from August 3. Platts is also proposing to change the NYH 3%S CIF specifications to conform to RMG 380, ISO 8217:2010 standard for petroleum products - Fuels (Class F) - Specifications of Marine Fuels with a maximum sulfur of 3.5%, with effect from January 4, 2021.

NYH 0.3%S LOW AND HIGH POUR:

Platts understands that the end-user market for 0.3%S LP fuel historically was Northeast heating and for 0.3%S HP was power generation, though liquidity in both of these markets has dwindled in recent years. Platts invites feedback on whether the two 0.3% assessments should be consolidated into one assessment. Additionally, Platts invites feedback on whether future 0.3% assessments should be valued through a fixed differential to other products, such as 0.5% Marine Fuel or NYH 1%S. Platts is also looking to update these specifications to better align with the respective end-user markets, and invites feedback on the full specifications it should reflect. The 0.3%S HP currently reflects fuel oil with a minimum-maximum gravity of 10.5-24.9 API, viscosity of maximum 300 SSF, pour point of maximum 110 F; minimum of 149,000 BTU/gal, flash point of minimum 175 F, BS&W of maximum 1.0%, sediment of maximum 0.3%. The 0.3%S LP reflects the same minimum-maximum gravity range, viscosity maximum of 1,000 SST at 100 degrees F, a pour point of maximum 60 F and a flash point of minimum 150 F.

NYH 0.7%S:

Platts understands that 0.7%S fuel is typically blended to meet regional power generation requirements. Platts is looking to update its specifications to better align this assessment with end-user markets, and invites feedback on the full specifications it should reflect.

Platts also invites feedback on whether 0.7% assessments should be valued through a fixed differential to other products, such as 0.5% Marine Fuel or NYH 1%S.

Currently the 0.7%S assessment reflects fuel oil with a gravity of minimum 10 API, viscosity of maximum 300 SSF, nitrogen of maximum 0.5%, vanadium of maximum 150 ppm, asphaltenes of maximum 8%, minimum of 151,500 BTU/gal, ash of maximum 0.1%, BS&W of maximum 1%, flash point of minimum 150 F, pour point of maximum 60 F, Al+Si of maximum 200 ppm.

NYH 1%S CIF:

Platts invites feedback on the specifications reflected in its NYH 1%S CIF assessment, specifically whether they should be adjusted to align with RMG 380, ISO 8217:2010 standard for petroleum products - Fuels (Class F) - Specifications of Marine Fuels, but with a maximum sulfur limit of 1%. This would include lowering the Al+Si and amending the viscosity.

Platts' NYH 1%S CIF assessment reflects fuel oil with an Al+Si content of maximum 80 ppm; nitrogen of maximum 0.5%; vanadium of maximum 150 ppm; minimum-maximum gravity of 10.1-18.0 API; minimum-maximum viscosity of 70-250 SSF; flash point of minimum 150 F; pour point of maximum 60 F; ash of maximum 0.1%; BS&W of maximum 1.0%; water by distillation of maximum 1.0%; sediment by extraction of maximum 0.1%; vanadium of maximum 150 ppm; sodium of maximum 60 ppm; asphaltenes of maximum 8%; minimum of 151,000 BTU/gal; H2S of maximum 50 ppm.

NYH 2.2%S:

Platts invites feedback on the specifications reflected in its NYH 2.2%S fuel oil assessments. Platts is also looking for feedback on whether the NYH 2.2%S assessment should be valued by applying a fixed differential to other products, such as 1%S and 3%S fuel oil.

The 2.2%S assessments reflect fuel oil with a gravity of minimum 10 API; viscosity of maximum 300 SSF; vanadium of maximum 300 ppm; Al+Si of maximum 80 ppm; flash point of minimum 150 F; BS&W of maximum 1%; ash of maximum 0.1%.

USAC LAYCANS AND DELIVERY TERMS:

Platts would also like to invite feedback on the best timings to reflect delivered cargoes in the US Atlantic Coast residual fuel market, including 0.3%S HP, 0.3%S LP, 0.7%S, 1%S, 2.2%S and 3%S, as well as the NYH Marine Fuel 0.5% assessment (AUAMB00). Platts' assessments currently reflect value 10-25 days forward. Platts has received feedback that these markets typically see more liquidity for more prompt dates, in line with the seven- to 15-day loading period on the US Gulf Coast.

Platts would also like feedback on the typical delivery terms for delivered barges of 50,000 barrels of fuel oil into New York Harbor. The delivered assessments are currently CIF but Platts understands it is common practice for transactions to be executed as DAP. Please send all comments to americas_products@spglobal.com. and pricegroup@spglobal.com by May 25, 2020.

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.