SUBSCRIBER NOTE: Platts to launch Murban cash M2, M3 assessments

In response to market feedback, S&P Global Platts will launch assessments for Murban crude cargoes loading three and four months forward from the date of assessment, effective January 2, 2019.

The assessments are in addition to the existing Murban M1 cash assessment, under code AAKNL00, which reflects oil for loading two months forward.

The assessments will capture the outright value of Murban crude loading three months and four months ahead, in line with Platts assessments for benchmark Dubai and Oman crudes.

Platts assessments of Dubai and Oman crude reflect additional delivery of Murban crude where the buyer agrees to pay the seller a quality premium.

In January 2019, the existing assessment and the two new assessments will reflect the outright prices of Murban crude loading in March, April and May.

Prior to this decision, Platts has engaged on this proposal with stakeholders representing a full range of crude oil market and industry participants in Asia.

Platts first proposed to launch Murban M2 and M3 cash assessments in a subscriber note published on October 10, 2018: https://www.spglobal.com/platts/en/our-methodology/subscriber-notes/101018-su bscriber-note-correction-platts-proposes-launching-murban-cash-m2-and-m3-asses sments

The Platts Market on Close assessment process for Middle East sour crude has seen a marked increase in bids, offers and trades for Murban crude partials and cargoes in recent months.

In addition, a Murban crude cargo was declared on convergence of Oman partials in August 2018 for the first time since Platts added Murban as a deliverable grade into Dubai and Oman assessments starting 2016.

Platts assessments of Murban crude reflect bids, offers and trades in 25,000-barrel partials or full cargoes, typically 500,000 barrels.

A destination-free cargo of 500,000 barrels with an operational tolerance of 0.2% is to be delivered when the same buyer and seller have traded 20 partials.

Bids, offers and trades for partials take precedence over larger cargo size in the assessment process.

Murban crude is produced at onshore fields in Abu Dhabi and is exported from Jebel Dhanna and Fujairah.

A publicly available assay of the grade indicates an API of 40.5 degrees and sulfur content of 0.743%.

The stream is one of the largest in the Middle East and has increasingly been visible in the spot market as a broadly fungible grade.

The onshore fields are operated by ADNOC Onshore, which is 60% held by ADNOC while the remaining stakes are held by BP (10%), Total (10%), CNPC (8%), JODCO (5%), CEFC (4%) and GS Energy (3%).

Please send all comments or questions to asia_crude@spglobal.com and pricegroup@spglobal.com.

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