SUBSCRIBER NOTE UPDATE: Platts proposes to rename, update USGC 3%S fuel benchmark

(Adds more publications in which the assessment appears)

Platts proposes to update the specifications reflected in its benchmark US Gulf Coast 3%S physical residual fuel oil assessments, also referred to as USGC HSFO and USGC fuel oil No. 6.

At the same time, Platts proposes to rename the assessment and standardize its name across all publications. The update in specification would take effect from October 1, 2016.

SPECIFICATION UPDATE: Platts proposes to update the specification reflected in this assessment to reflect IFO 380 3.5%S fuel oil specifications.

NAME UPDATE: Platts proposes to rename this assessment as "USGC HSFO" and standardize the name of the assessment across all publications. This assessment is currently published in the Platts price database under the data code PUAFZ00, in Platts US Marketscan as "No. 6 3%" in its "Gulf Coast" table, in Oilgram Price Report as "Gulf Coast No. 6 3.0%S (Waterborne) Fuel Oil," in Latin American Wire as "Fuel Oil 3%S," and in North American Crude and Products Scan as "Resid 3%." This name change will align the description in all locations, and better reflect current and future sulfur specifications.

BACKGROUND TO SPECIFICATION CHANGES: The goal of the update is to bring the specifications reflected in the assessment more closely into line with the current primary end-use for fuel oil, which is to meet bunker fuel demand by the maritime sector. This move would also align the Platts US Gulf Coast HSFO assessment with similar assessments in other major fuel oil trading hubs, such as Amsterdam-Rotterdam-Antwerp and Singapore.

Platts' existing Gulf Coast HSFO specifications reflect the needs of blenders looking to potentially supply both demand for bunker fuel, as well as potentially supply electric utility demand, particularly in the Mexican electricity sector. Mexico has been reducing its consumption of fuel oil for power generation and is now a net exporter of the product. Utility demand for fuel oil has fallen significantly in general, reducing the need for a spec to meet both potential fuel oil uses.

Platts' intention is to give the market ample time to provide feedback on the proposed change. These proposed changes follow several months of consultation with market participants, culminating most recently in a broad review of the assessment announced May 27, 2015. Platts intends to host a public technical workshop to review these proposals and collect feedback at a location and date to be announced separately.

Platts invites initial feedback by September 30, 2015, to americas_products@platts.com and pricegroup@platts.com.

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