Methodology evolved as market looks beyond Singapore storage
Platts, a leading global energy, petrochemicals and metals information provider and a premier source of benchmark price references, today introduced the Free-On-Board Straits (FOB Straits) process in its price assessments for refined oil products.
The FOB Straits process is an update to price discovery methodology that forms the basis of the Platts FOB Singapore benchmarks for fuel oil, gasoil, jet fuel and gasoline. As part of its price assessment process, Platts publishes bids, offers and transactions, as determined by buyers and sellers in the open market, for loadpoints in Singapore and four ports in Johor, Malaysia.
This introduction of the FOB Straits process is the result of continued Platts consultations with the market and industry. A formal proposal was announced July 17, 2014, and the decision to change the methodology was announced on December 22, 2014. The evolution of the FOB Singapore assessments reflects the significant growth in the Singapore refined oil products markets over the last several years.
"Platts believes that benchmark price assessments must evolve with the marketplace, and for this reason, Platts regularly reviews with the marketplace and industry its offering of price assessments and the methodology and specifications underpinning those assessments," said Jonty Rushforth, Platts editorial director of Asia and Middle East oil markets.
The limited possibility of further expansion of Singapore's on-land oil storage, coupled with growth in nearby Johor and the Riau Islands, means trading of products - and the benchmarks that reflect that activity - have spilled beyond Singapore's traditional boundaries and into new frontiers. The associated spot markets now regularly include trades for commodities loading close to, but beyond the geographic borders of, Singapore. These ports include southern Malaysia oil terminals: Pasir Gudang, Tanjung Langsat and Pengerang Terminal to the north east of Singapore, and Tanjung Bin, to the west of the city-state.
Under the revised approach, Platts will only publish bids and offers and transactions as FOB Straits, and no longer publish FOB Singapore or FOB Malaysia bids, offers or transactions in its Market-on-Close (MOC) assessment process. However, Platts will continue to reference these assessments in all publications under the current "FOB Singapore" nomenclature.
More details about FOB Straits and MOC:
FOB Straits Explained: http://plts.co/OYiT7
FAQ on FOB Straits (pdf): http://plts.co/OYj00
Whitepaper on FOB Straits (pdf): http://plts.co/OYj3h
Asia refined oil products assessment methodology (pdf): http://plts.co/OYj5F
MOC assessment process: http://plts.co/OYj7d
Global/EMEA: Paul Sandell, + 44 (0)7816 180039, email@example.com
Americas: Kathleen Tanzy, +1 917-331-4607, firstname.lastname@example.org
Asia: Melissa Tan, +65-6597-6241, email@example.com
About S&P Global Commodity Insights
At S&P Global Commodity Insights, our complete view of global energy and commodities markets enables our customers to make decisions with conviction and create long-term, sustainable value.
We’re a trusted connector that brings together thought leaders, market participants, governments, and regulators and we create solutions that lead to progress. Vital to navigating commodity markets, our coverage includes oil and gas, power, chemicals, metals, agriculture, shipping and energy transition. Platts® products and services, including the most signiﬁcant benchmark price assessments in the physical commodity markets, are offered through S&P Global Commodity Insights.
S&P Global Commodity Insights is a division of S&P Global (NYSE: SPGI). S&P Global is the world’s foremost provider of credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity and automotive markets. With every one of our offerings, we help many of the world’s leading organizations navigate the economic landscape so they can plan for tomorrow, today. For more information visit https://www.spglobal.com/commodityinsights