SUBSCRIBER NOTE: Platts clarifies Chicago gasoline, jet fuel, diesel methodology

Houston (Platts)--2Jul2018/1205 pm EDT/1605 GMT S&P Global Platts has clarified the methodology of its Chicago refined products assessments with effect from July 2, 2018, in order to bring clearer definition to the generic Chicago basis currently used in the assessments.

The Chicago assessments now reflect the lowest value between the Badger, West Shore and Wolverine pipelines. Platts has not changed any of the current Chicago assessment names.

ASSESSMENT PROCESS: From July 2, Platts will only publish tradable bids and offers and related transactions in the Platts Market on Close assessment process that name a specific Chicago location.

Bids, offers or trades for locations other than Badger, West Shore and Wolverine may be included in the assessment process but will be normalized back to the same generic basis. This includes jet fuel at Des Plaines and East Chicago. Note that for CBOB gasoline trades for West Shore, Platts understands that delivery only goes to Milwaukee, Wisconsin.

BACKGROUND: The decision follows a formal review of Chicago assessment methodology announced in a subscriber note on February 8, 2018, to more fully reflect typical trade in the Chicago market.

Platts' former Chicago assessment methodology was based on a generic Chicago basis, as opposed to any specific pipeline. Bids, offers or trades for product delivered into Chicago for a specific pipeline were then normalized back to the generic Chicago basis for assessment purposes.

REVIEW FEEDBACK: Feedback gathered during the review confirmed that the majority of observed Chicago market activity is based on a specific, rather than generic, basis. In addition to the pipelines named in the existing Platts methodology, the Buckeye Complex storage hub is increasingly used as the basis for many gasoline and diesel trades.

NEW BUCKEYE COMPLEX ASSESSMENTS: Platts also has added new ULSD and CBOB and RBOB gasoline assessments to be based on the Buckeye Complex storage hub. This change was addressed in a separate subscriber note.

Platts has maintained all other aspects of Chicago methodology, including timing, now tied to three Explorer Pipeline cycles rolling to a new month on the 25th of each month, then rolling on the 5th and 15th for the second and third cycles.

The new assessments and their symbols are as follows:

Gasoline CBOB Chicago Buckeye Complex ACBAA00 Gasoline CBOB Chicago Buckeye Complex Differential to NYMEX RBOB ACBAB00 Gasoline RBOB Chicago Buckeye Complex ACBAC00 Gasoline RBOB Chicago Buckeye Complex Differential to NYMEX RBOB ACBAD00 ULSD Chicago Buckeye Complex ACBAE00 ULSD Chicago Buckeye Complex Differential to NYMEX ULSD ACBAF00

The assessments can be found on Platts Global Alert pages 160, 420, 320, 481, 321 and 421, and in Oilgram Price Report and US Marketscan.

Please send any feedback to americas_products@spglobal.com and pricemethodology@spglobal.com. 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.