SUBSCRIBER NOTE: Platts launches 10-day rolling freight average of Dirty Cross-UKC 80,000-mt assessment

S&P Global Platts has begun publishing a 10-day rolling freight average of its existing Dirty Cross-UK Continent 80,000-mt assessment as of September 2, 2019.

As previously announced, this assessment will be reflected in its Dated Brent crude oil benchmark through the freight adjustment factor to adjust CIF Rotterdam offers, for which the corresponding note can be found here: https://www.spglobal.com/platts/en/our-methodology/subscriber-notes/022519-pl atts-to-reflect-cif-rotterdam-offers-in-dated-brent-from-november-2019-loadin gs

Platts is publishing a 10-day rolling freight average on the day before the applicable crude Platts Market on Close assessment process to ensure the freight factor is fully known before the North Sea crude oil assessment process begins. This is based on its 10 previous assessments of the Dirty Cross-UK/Continent 80,000-mt freight.

This rolling average will be used to calculate the freight adjustment factor, applied to CIF cargo information shown in the MOC process for assessment purposes. The derived FOB values will be used in determining value versus an FOB bid in the assessment process for each of the five grades in the Dated Brent basket.

Platts will separately begin publishing the factors, and will update subscribers about those in a later subscriber note.

Platts will phase in the level of freight adjustment over the course of three months until it reaches 80%. From October 1, a factor of 40% will be applied to November-loading CIF-equivalent cargoes in the Dated Brent assessment, rising to 60% for December-loading cargoes, and 80% for January-loading cargoes onwards. These percentages will be applied to the cargo's freight rate from its respective terminal to Rotterdam and associated port fees.

From September 2, Platts has begun publishing the rolling average of the Cross-UKC Worldscale percentage assessment, as well as individual 10-day rolling averages of the five $/mt freight rates: Sullom Voe-Rotterdam, Hound Point-Rotterdam, Sture-Rotterdam, Teesside-Rotterdam and Mongstad-Rotterdam.

Platts will later begin publishing the adjustment factors, including phased percentages, that would be applicable in the North Sea crude MOC. These factors will be databased against the date for which they will be applicable, whereas the underlying freight rates will be databased against the previous day -- the date of publication.

The Dirty Cross-UK/Continent 80,000-mt freight assessment is published in Platts services under code PFAKD10.

Please address any comments and questions to shipping@spglobal.com with a copy to pricegroup@spglobal.com

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