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Platts American GulfCoast Select (Platts AGS)

  • What is Platts American GulfCoast Select?
  • How do we assess Platts American GulfCoast Select?
  • Evolution of Platts American GulfCoast Select
  • Platts American GulfCoast Select – Export Crude Commentary

What is Platts American GulfCoast Select?


Platts AGS reflects the value of light sweet crude oil loading 15-45 days forward on an FOB basis from locations along the US Gulf Coast including Houston, Corpus Christi, Beaumont, Nederland, Texas City, and Port Arthur, with the most competitive location on a cargo-size normalized basis setting the price assessment.

This crude oil assessment reflects a typical cargo size of 700,000 barrels, with bids, offers and trades between 550,000 and 800,000 barrels eligible for use in the assessment but normalized to reflect the freight economics of the typical cargo size. The assessment reflects the Platts WTI Midland grade supplied directly from the Permian Basin on the BridgeTex, Longhorn, Midland-to-Echo I/II, Cactus I/II, EPIC, Gray Oak, and Permian Express pipelines with API between 40 and 44 and .2% sulfur limit, among other specifications.

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How do we assess Platts American GulfCoast Select?

Platts AGS is assessed based on market information gathered during the day by market reporting staff and bids, offers, and trades published on the Platts eWindow communication tool. The assessment follows Platts Market on Close principles with bids, offers, and trades – converted to outright values for comparison – determining value at the 1:30 Central Time close.

Evolution of Platts American GulfCoast Select

Platts AGS brings the US oil market a new benchmark assessment that reflects the value of high-quality, export-ready crude at the intersection of domestic and global demand, free of any distortion from logistics.

Platts American GulfCoast Select – Export Crude Commentary

  • Platts AGS assessed at $66.03/b, weaker against forward Dated Brent strip
  • Fewer arbitrage opportunities to Asia contributing to export weakness

Platts American GulfCoast Select was assessed at $66.03/b on May 14, with the differential for the grade moving lower against both the 15 to 45 days forward NYMEX WTI strip and forward Dated Brent strips.

Sources have noted weakness in demand for exports as well as length in the Atlantic basin crude market.

“What I’ve been hearing is that [the] international market is much weaker than the domestic one,” one trader said, noting a disparity between the bids seen on FOB cargoes compared with the levels the barrels are being placed at within the domestic market.

Sources have also noted to Platts that length in the European sweet market, particularly with ample supplies of US grades, has led to a divergence in values for WTI crude in Europe versus regional North Sea grades, with US grades coming under pressure. Also, fewer arbitrage opportunities for US crude into Asia has increased availability of US crude and added to the weakness, a source told Platts.

Through the start of May, the arbitrage incentive for WTI MEH crude into Japan against local ESPO crude has averaged minus $1/b, while in April and March the arbitrage incentive averaged minus $1.11/b and minus $1.12/b, respectively, according to the Platts Crude Arbflow Calculator.

Also, slower demand from India as the country battles a sharp increase in coronavirus infections and as some refiners begin to cut runs have left more West African barrels, particularly Nigerian cargoes, in the market as India was a major purchaser of crude from the West African country.

“Many May Nigerian cargoes still there being shown pretty discounted,” a trader noted.

US crude exports to Europe were strong in recent weeks, with the four-week moving average of US crude exports to Europe over the period ended May 14 at 1.22 million b/d, according to data from data intelligence company Kpler, but a trader did not see exports working to the region “for the marginal player.”

In terms of Platts AGS’ assessed differentials May 14 against the forward NYMEX WTI strip, Platts AGS was assessed a penny weaker on the day at a 71 cents/b premium, while against the forward Dated Brent strip, the grade was assessed 25 cents/b weaker on the day at a $2.27/b discount.

The most recent offer level heard for June loading WTI cargoes out of the USGC May 14 was at a $2.20/b discount to August ICE Brent futures.

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