SUBSCRIBER NOTE: Platts launches independent Middle East oil assessments

S&P Global Platts has launched independent price assessments for a range of refined oil products in the Middle East market effective October 3, 2016.

These new spot price assessments are labeled as "FOB Fujairah" in Platts publications and databases, and run alongside Platts' existing MOPAG netbacks.

The new assessments for gasoline, gasoil, jet fuel and fuel oil are published alongside Platts existing physical netback values for these products. The new assessments reflect trade on a FOB basis at good ports across the Gulf, fully normalized to a FOB Fujairah basis.

The Middle East has seen substantial growth in refining and storage capacity over the past decade, as well as widespread growth in physical oil trading and market participation. These factors have led to a more vibrant and active spot physical market for oil products, which will be the basis for these assessments.

NEW ASSESSMENTS: From October 3, Platts will publish independent, outright assessments on a FOB basis for 95 RON gasoline; 10 ppm sulfur gasoil and 500 ppm gasoil; jet fuel; and 380 CST high sulfur fuel oil.

Assessment Code Volume Loading Period Gasoline 95 RON AAWUJ00 200-300 kb 20-40 days Jet Kero PJACV00 200-300 kb 20-40 days Gasoil 10 ppm AAIDU00 200-300 kb 20-40 days Gasoil 500 ppm AAFFD00 200-300 kb 20-40 days HSFO 380 CST AAXJB00 20-40 kt 20-40 days

For each of these products, Platts already publishes physical differential assessments, which would be used to assess the outright values alongside any bids, offers or trades on an outright basis.

The outright values would reflect the same specifications and terms as the existing differentials.

Gasoline: Platts will publish five new assessment values for 95 RON gasoline -- comprising a cash assessment for cargoes loading 20-40 days forward; three monthly derivatives assessments; and a 95 RON MOPAG strip value.

Gasoil: Platts will publish six new assessment values for gasoil -- comprising one cash assessment each for 500 ppm and 10 ppm cargoes loading 20-40 days forward; three monthly derivatives assessments for 500 ppm swaps; and a 500 ppm gasoil strip value.

Jet fuel: Platts will publish five new assessment values for jet fuel -- comprising a cash assessment for cargoes loading 20-40 days forward; three monthly derivatives assessments; and a jet fuel MOPAG strip value.

Fuel oil: Platts will publish five new assessment values for 380 CST HSFO -- comprising a cash assessment for cargoes loading 20-40 days forward; three monthly derivatives assessments; and a 380-CST MOPAG strip value.

LOADING PORTS: Cargoes loading from the following Gulf ports would be considered for inclusion in the assessments: Jubail, Jebel Ali, Mina Al Ahmadi, Quoin Island, Shuaiba, Ras Tanura, Ruwais, Mina Abdulla, Sohar, Bahrain, Fujairah, Ras Laffan and any safe and sound port within this geographic area. The assessments would be normalized to loadings in Fujairah for all products.

Platts will only publish offers where sellers specify at least one and no more than three representative load points and will only publish bids where buyers specify at least three representative load points.

For all trades reported through the Platts Market on Close process for the above assessments, the seller would declare the terminal 12 days prior to loading. The buyer would nominate the vessel seven days prior to loading and narrow the loading window to three days, subject to terminal acceptance.

DERIVATIVES: Alongside the physical assessments, Platts will also publish MOPAG derivatives values for balance month and two forward months for 95 RON gasoline, 500 ppm gasoil, jet fuel and 380 CST fuel oil. These derivatives settle on the average of Platts netback outright values, known as MOPAG.

For each product, Platts will also assess a MOPAG "strip" value. The strip would reflect the average of daily swap values over a 21-day period between 20-40 days from the day of publication.

The strip value published by Platts in certain oil markets represents the value the market assigns to future Platts assessments, through trading in physical or derivatives instruments on strip-related prices. This value is determined by analyzing the derivatives market.

Platts will assess derivatives values based on trades seen in the Platts MOC process or on derivatives exchanges or heard in over-the-counter markets. In the absence of any trades, Platts will assess the value of MOPAG derivatives taking into consideration the respective Singapore derivatives coupled with freight netback and forward freight agreement values.

TIMESTAMP: All the price assessments would reflect the tradable value of these markets at 12:30 pm Dubai time. This timestamp would align the new assessments with the respective netback values that Platts already publishes in the Middle East, corresponding to the 4:30 pm Market on Close in Singapore.

MOPAG NETBACKS: Platts netback price assessments for the Middle East derive their values from the price assessments at the regional trading hub of Singapore after adjusting for shipping costs. The launch of the new assessments will not affect these netback values, and Platts has no plans to change or discontinue MOPAG netbacks.

FEEDBACK: Please send all comments and queries to asia_products@platts.com and pricegroup@platts.com.

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