S&P Global Platts is proposing to launch Aframax 70,000 mt US Gulf Coast-UK Continent freight derivative assessments, effective Nov. 1, 2021, to provide further transparency to the US Gulf Coast crude oil export and freight markets.
Under the proposal, Platts would publish derivative assessments for the balance month, current month and three forward months.
There has been increasing interest in freight forward contracts on this route, following growing crude exports from the US to Europe.
US crude exports from the Gulf Coast to Europe increased to an average of 970,000 b/d in the first six months of 2021, compared with 110,000 b/d throughout the whole of 2016, according to US Census data. Of the total US crude export volume H1 2021, shipments to Europe comprise about a third of total volumes, up from a 19% share in the whole of 2016, according to the data.
The balance-month and current-month derivatives would be assessed from the first, up to and including the 15th of each month. The balance-month contract would financially settle against the Platts Aframax 70,000 mt USGC-UKC spot freight assessments (Platts price database code TDUCF00) on every remaining publishing day of the month, including the day of publication. The current month contract would financially settle against the same Platts spot freight assessment on every publishing day of the month.
The three forward-month contracts would also financially settle against the Platts Aframax 70,000 mt USGC-UKC spot freight assessments on every publishing day in the month, and these would roll on the first publication day of each month.
All assessments would reflect a minimum volume of 1,000 mt. The proposed assessments would be published in Worldscale points as well as US dollars per mt.
The assessments would reflect the transactable value of the contracts at 1:30 pm Houston time, and would follow the Houston publication schedule.
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