Platts launches Platts American GulfCoast Select crude oil benchmark

S&P Global Platts is launching a new benchmark for US crude oil, to be called Platts American GulfCoast Select (AGS), effective June 26.

The new benchmark will reflect the value of waterborne light sweet crude loading FOB US Gulf Coast, and be published under the Platts symbol AGSAA00.

The launch follows feedback from producers, consumers, traders and others in the US oil market calling for a new crude pricing benchmark that directly reflects US light sweet crude's value in the global market, free from domestic logistical constraints.

In addition to an outright price in $/barrel, Platts is also launching two differential assessments showing the value of Platts AGS versus a Dated Brent forward strip (AGSAB00) and a NYMEX WTI forward strip (AGSAC00), aligned to the assessment's 15-45 day loading window.

The assessments will be published on Platts Global Alert and in the Crude Oil Marketwire, Oilgram Price Report and the North American Crude and Products Scan.

SPECIFICATIONS: Platts AGS reflects the value of a light sweet crude loading in the US Gulf Coast. The assessment will initially reflect only light sweet crude supplied direct from the Permian Basin on specified pipelines. Those pipelines are BridgeTex, Longhorn, Midland-to-Echo I/II, Cactus I/II, EPIC, Gray Oak, and Permian Express. Additional provenance may be added based on market feedback.

In addition to pipeline provenance, the new assessment will reflect a 0.2% sulfur limit, 75 ppm mercaptan limit, and 38-44 API gravity.

Platts will review the specifications going forward based on market feedback, including feedback to its previous proposal on amending the specifications of Platts WTI Midland global assessments, published June 23 and available here: www.spglobal.com/platts/en/our-methodology/subscriber-notes/062320-platts-proposes-specifications-for-wti-pipeline-cargo-assessments. These include additional proposals on metals content and the possible inclusion of distillation point limits.

Platts understands that WTI Midland crude typically meets these provenance and specification guidelines, and would therefore be reflected in the new assessment.

Other crude grades, including Bakken, that meet these guidelines may be reflected in the Platts AGS basket of crudes after review and following market feedback.

LOAD PORTS: Platts AGS reflects typical ports used for loading Aframax vessels along the Gulf Coast including Corpus Christi, Texas City, Houston, Beaumont, and Nederland, with the assessment reflecting the most competitive location.

LAYCAN: Platts AGS reflects cargoes loading in a 15-45 day window from the day of the assessment. This means that the June 26 assessment will reflect cargoes loading from July 11 to August 10. Bids, offers and trades reported to Platts for inclusion in the assessment should specify at least a five-day loading period.

CARGO SIZE: Platts AGS assessment reflects typical cargo size of 700,000 barrels with a range of 550,000 barrels to 800,000 barrels included for the assessment. Platts understands that the tradable value for crude cargoes FOB the Gulf Coast is sensitive to cargo size as buyers seek to optimize their freight cost. Cargoes loading at docks or ports with lower draft restrictions may trade at a discount to a similar cargo loading at a dock with 700,000 barrel or more loading capability. To provide fungibility across the Gulf Coast, Platts will normalize the assessment of any cargo to reflect a 700,000 barrel cargo using that day's US to UK Aframax 70kt freight assessment (Platts symbol: TDUCF00). For example, a 600,000 barrel cargo traded at $40.35/b when the freight assessment was $13.76/mt ($963,200 lump-sum) would be applied for assessment purposes at $40.58/b to account for the higher per barrel freight cost of the below-typical cargo size.

BIDS, OFFERS, TRADES: Platts will reflect in Platts AGS assessment published bids, offers, transactions and expressions of interest to trade that clearly state crude grade, laycan, and price, and that meet Platts guidelines for clarity and transparency. Participants in the Platts MOC assessment process will be able to submit bids and offers for publication directly through the Platts Editorial Window, or eWindow, software or through an editor, who would then publish bids and offers using the software.

MARKET ON CLOSE: Platts will publish bids, offers, transactions and expressions of interest from approved participants in the US Gulf Coast crude Market on Close process in line with its editorial standards and guidelines. For more information on the counterparty review process, please visit www.spglobal.com/platts/en/our-methodologies/market-on-close. Entities that wish to participate in the MOC should contact pricegroup@spglobal.com.

Platts MOC guidelines are a key component of its assessment methodology, essential to an orderly and transparent price discovery process. They are aimed at bringing greater clarity and transparency to the assessment process for Platts AGS. Besides information published in the MOC, Platts editors also engage directly with producers, consumers, traders, brokers and shippers to gather price information.

Please send any comments or feedback to americas_crude@spglobal.com and pricegroup@spglobal.com. 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.