S&P Global Platts will raise the minimum threshold for quality premium that sellers receive for the nomination and delivery of a cargo of Murban crude oil into a physical convergence of Dubai, Al Shaheen, Upper Zakum or Oman partials during the Platts Market on Close assessment process, effective April 1, 2020.
Platts will raise the minimum threshold to 50 cents/b from 25 cents/b for the Murban quality premium, which is set at 60% of the net price difference between Platts front-month cash Murban assessment and Platts front-month cash Oman assessment during the full month prior to announcement.
The higher minimum threshold will mean that a QP of $0.00/b will be announced if 60% of the observed price difference between the Platts Murban and Oman assessments during the prior month is less than 50 cents/b.
The change follows an unprecedented narrowing of the relative value of Murban compared with other grades in the Oman and Dubai baskets.
Platts announces the Murban QP on the first publishing day of each month, two months prior to the QP coming into effect. As an example, Platts would announce Murban QP on the first business day of April, for cargoes loading in June. This calendar aligns with typical trading practices, where June cargoes are primarily traded in the month of April.
Platts Murban assessment reflects bids, offers and trades for Murban partials or full cargoes in the Platts Market on Close assessment process as well as information heard in the broader market.
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