SUBSCRIBER NOTE: Platts to rename, broaden scope of WTI FOB Houston assessment

S&P Global Platts will redefine and rename its WTI FOB Houston assessment as WTI FOB USGC with effect from August 1, 2018, to more broadly reflect the evolving regional crude export market.

The decision follows a July 23 proposal note and period of time for feedback.

Significant volumes of US crude are being exported from the Gulf Coast to countries around the world. West Texas Intermediate is the dominant export grade thanks to booming production and numerous pipeline additions and infrastructure improvements that allow it to be loaded and shipped from multiple ports.

To reflect this dynamic market, Platts will consider values for WTI cargoes on an FOB basis from locations along the USGC, including Corpus Christi, Texas City, Houston, Beaumont, Nederland and Port Arthur. The most competitive location will set the value for the WTI FOB USGC assessment.

The grade reflected will continue to be Midland-quality WTI produced in the Permian basins of West Texas and transported directly to the USGC. Recent assays show Midland WTI to be 42-44 API, 0.13%-0.35% sulfur.

The revised assessment will continue to reflect Aframax vessels, with a typical size of about 600,000 barrels. Platts recognizes not all Aframaxes may hold the same amount of crude oil, and that characteristics of the crude itself as well as port restrictions may change the amount able to be loaded.

The following methodology changes for the assessment will take effect August 1:

TIMING: The revised assessment will reflect a laycan of 15-45 days forward. For example, on August 1, Platts will assess WTI FOB USGC cargoes loading August 16-September 15. This change will align with the revised Eagle Ford crude and condensate FOB USGC and new Bakken FOB USGC assessments. Currently, the Platts WTI FOB Houston assessment rolls to the second month forward on the 15th of the month.

DIFFERENTIAL BASIS: The revised differential will reflect the value of WTI FOB USGC cargoes versus a 15-45 day NYMEX WTI Light Sweet Crude Oil futures strip. This is a change from the existing cash WTI CMA basis.

RENAMING ASSESSMENTS: Platts will rename the WTI FOB Houston assessment as WTI FOB USGC (AAYBA00) while the existing differential vs forward WTI would be renamed WTI FOB USGC vs NYMEX WTI strip (AAYAZ00).

MOC GUIDELINES: Platts will publish bids, offers and trades for WTI FOB USGC cargoes during the Market on Close assessment process, with clearly stated locations and dates; sellers will commit to providing Midland-quality WTI cargoes.

The affected assessments appear on Platts Global Alert pages 210, 214 and 222 and in the publications Crude Oil Marketwire, North American Crude and Products Scan and Oilgram Price Report.

Please send any questions or comments 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.