Following a formal consultation, S&P Global Platts will discontinue the New York Harbor 0.3%S HP, 0.3% LP and 0.7%S assessments effective January 3, 2022.
Starting October 1 Platts will assess these markets using a fixed differential to USAC Marine Fuel 0.5%S. Platts will update the market on the value of those differentials prior to that date. Beginning that date Platts will no longer reflect bids, offers and trades for 0.3%S HP, 0.3%S LP or 0.7%S in these assessments.
This proposal follows a subscriber note that opened a formal consultation on all US Atlantic Coast fuel oil assessments that began on April 13: https://www.spglobal.com/platts/en/our-methodology/subscriber-notes/041320-platts-opens-consultation-on-usac-residual-fuel-oil-assessments
The affected assessments are as follows:
NYH 0.3%S HP: PUAAE00
NYH 0.3%S LP: PUAAB00
NYH 0.7%S: PUAAH00
NYH 0.3%S HP vs NYH 1% MOPS: AAUGA00
NYH 0.3%S LP vs NYH 1% MOPS: AAUGB00
NYH 0.7%S vs NYH 1% MOPS: AAUGC00
The assessments were proposed to be discontinued on January 4, 2021, but Platts understands that there are long-term contracts pricing off the 0.3%S LP, 0.3%S HP and 0.7%S assessments and market feedback suggested a longer lead time before discontinuation of those was needed.
Platts understands that while there remains local demand of low sulfur fuel oil for power generation and heating purposes, this demand has seen a significant decline in recent years.
Platts also understands that the specifications represented by NYH 0.3%S LP, 0.3%S HP, and 0.7%S do not meet any broad-based end-user demand in the region without subsequent blending. Demand in the USAC has shifted towards a 0.5%S product for power generation. Oil-fired power generation use has also shifted towards No. 2 or No. 4 oil due to ease of use and/or state regulations.
Most of the LSFO for power generation that does trade around New York Harbor is for small volumes, and is done on a term basis with little spot activity. This differs from more liquid spot markets such as those reflected in Platts NYH 1%S and USGC HSFO assessments, which are used as global benchmarks yet also have significant local physical market flows.
Platts also understands that there has been a marked decline for high sulfur fuel oil for power generation, and there is now insufficient physical flow to support the NYH 2.2%S assessment.
These assessments appear on Platts Global Alert page 30, 38, 39, 152, 510, and 511. The assessments also appear in Platts US Marketscan, Platts Oilgram Price Report, Platts European Marketscan, Platts Gas Daily, and in the Platts price database.
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