SUBSCRIBER NOTE: Platts to review USGC M1 gasoline pipeline assessments

Platts is reviewing the continued viability of its US Gulf Coast conventional unleaded 87 gasoline M1 pipeline assessments and invites feedback from interested parties to the review process.

The goal of the review is to determine whether or not Platts conventional unleaded 87 USGC pipeline assessments should continue to reflect 7.8 RVP gasoline, known as M1 on the Colonial Pipeline, in the summer months.

Platts currently assesses the lowest fungible grade of USGC conventional unleaded, meaning that it reflects M4 (13.5 RVP) gasoline in the winter, transitioning through M3 (11.5 RVP) and M2 (9.0 RVP) in the spring and then assessing M1 (7.8 RVP) through the summer. During the summer period when the main assessment reflects M1, Platts also publishes a supplemental assessment for M2.

In July, Colonial Pipeline gave notice that it would no longer ship M1 because of limited demand from shippers. Although this decision was very swiftly reversed for 2015, at this point it is not clear whether or not M1 will be shipped on the pipeline in summer 2016.

In addition, Platts has noted a marked decline in liquidity for M1 pipeline barrels through the Market On Close process in recent years.

In summer 2015, pipeline trades amounting to a total volume of 550,000 barrels were recorded for M1 during the MOC process, similar to the volume of 575,000 barrels in 2014. These last two summers show how volumes have fallen from 2.25 million barrels in 2013 and 1.575 million barrels in 2012.

As a result, Platts is particularly interested in feedback on whether the conventional unleaded 87 assessment should no longer shift to M1 during the summer, but instead remain on an M2 (9.0 RVP) basis.

This change would not necessarily apply to the USGC waterborne gasoline assessment for 50,000-barrel barges, where more liquidity for M1 in the summer has been evident in 2014 and 2015 than on the pipeline.

Platts assesses the first six forward cycles of conventional unleaded 87, with the assessments published on Platts Global Alert, in the US Marketscan and Oilgram Price Report and in the Platts price database under the data codes AAELC00, AAELD00, AAELE00, AAELF00, AAELG00 and AAELH00. The prompt cycle is also databased under the price code PGACT00.

Please send any feedback by October 30, 2015, to americas_products@platts.com and pricegroup@platts.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.