Subscriber note: Platts to modify Latin American crude oil methodology

Platts confirms that it will implement several key changes to its Latin American crude oil price assessment methodology, aimed at providing additional price transparency, reflecting a trend towards further forward trading, and addressing the growing use of Brent as a pricing basis for Latin American crude export sales. Platts will implement these changes on January 2, 2013, following feedback to the proposals that were first published on July 3, 2012. First, Platts will move the timing forward for its Latin American crude assessments to reflect bids, offers, and deals 30-60 days from date of publication. Currently, Platts Latin American crude assessments reflect crude loading 15-45 days forward from date of publication. This move will reflect a trend in the market towards trading Latin crudes further forward in time. Platts announced in July 2012 that the Latin America crude laycan of 15-45 days forward would likely evolve to new 30-60 days forward date range beginning 2013 in response to changes in the Latin American crude oil market. Second, Platts will shift the basis for its Latin American assessments from second month WTI to the average of the prevailing front-month contract at the time of loading. For example, on June 1, the basis for Platts Latin American crude assessments would be August WTI. Under this proposal, the basis for Platts Latin American crude assessments on June 1 would reflect the average of prevailing front month WTI for July 1-31 - August WTI for July 1-25, and September WTI for July 26-31. Platts will publish this Latin American WTI strip on a daily basis. In addition, Platts will launch ICE Brent and Dated Brent-related differentials for all Latin American crudes assessed by Platts and a Latin American ICE Brent strip and a Latin American Dated Brent strip, reflective of the prevailing front-month Brent values for 30-60 days forward from the date of publication. These Brent-related differentials and strips will run alongside the existing WTI-based outright price and differential assessments for Latin American grades. These three new strip assessments for WTI, ICE Brent, and Dated Brent and the Brent-related differentials will appear on Platts Global Alert page 280, in Platts Market Data, Crude Oil Marketwire, Oilgram Price Report and in Platts Latin American Wire. For questions or comments, please contact americas_crude@platts.com, with a cc to pricegroup@platts.com.