Transcription
Platts methodology and pricing trends infuel oil: Bunker Summit May 10
Agenda Platts: the role of Platts and ourmethodology Fuel oil cargo pricing: Currentmethodology, recent changes andpotential proposals Bunker fuel pricing
The Platts Profile Role: enable global energy markets tofunction with efficiency, transparency andintegrity Capabilities: benchmark pricing, real-timenews, market analysis, analytical databases,geospatial tools Customers: producers, end-users,governments, traders, marketers, refiners,regulators, analysts, managers, consultants
Principles of Market Coverage Price formation must be fully independentand impartial We use highly structured methodologies todetermine accurate and precise marketvalues and apply them consistently We seek to gather data from all marketparticipants Platts’ standards call for confirmation of allinformation published
Editorial Protocol Bids and offers must be transparentCompanies are namedCompanies must performBids/offers must move incrementallyDeals must be traceableStrict time parameters
MOC procedures Cargo bids or offers must be received by Plattsby 15.45 London time Barge bids or offers must be received by Plattsby 16.00 London time. After the deadlines onlyprices may be adjusted by a maximum of 1/mtper minute From 16.28 London time there may be no furtherprice adjustments 16.30 London time MOC window closes, theexact moment of price assessments
Normalization Timing Delivery dates Quality Volumes Location Type of ship OtherXX
Examples of bids/offers HSFO CARGO: Galaxy offers cargo of hsfo 25 -30 kt of 991, 380 cst, rest rmg iso8217 offers cif basis genoa lavera 10-14 may delivery same specs and quantity asabove at 341 usd per mt on vessel with at least 2 major approvals (bp -shell)discharge 1/2 sp med excluding albania, yugo, b former Yugoslavia, TOC, Lebanonand Israel. HSFO CARGO: GUNVOR offers 30 kt /-10% at seller's option, following qualities:density 0.991 max / visco 380 cst max / sulfur 3.5 max / CCR 18max / total sedimentspotential 0.10 max / vana 300 max / alu sili 80 max / pour 30 max / ASH 0.15 MAX/FLASH 65 DEGC MIN / water 0.5% / h2s 2 max max CIF basis genoa 10-14 may,vessel at least 2 majors approved (bp, shell), DISCH 1/2 SP MED EXCLUDINGALBANIA, YUGO, FORMER YUGO, TURKISH OCCUPIED CYPRUS, LEBANON,ISRAEL at mean med Platts 3.5 13.00 avg of may pricing HSFO CARGO: BP bids for 30 000 mt /-10% buyer option of hsfo 991 density, 380visco, 0.5 water, 65 flashp, 30 pourp, 0.10 ash, 18 ccr, 300 van, 80 al si, 0.10/0.10hft ip 375 390, 3.5 su, 2 h2s IP 399, the rest RMG iso 8217 fob any med 17-21 Mayat average May mean platts 3.5 barge quote 6/mt basis italy loading.
Tightening of normalized Platts specification FUEL OIL SUBSCRIBER NOTE: Following industry feedback, Plattswill from January 2, 2007 reflect bunker quality fuel oil in its highsulfur fuel oil 3.5% sulfur FOB and CIF Mediterranean assessments,in line with prevailing market trends. A specific gravity of 0.991mg/kg and a viscosity of 380 centistokes will be reflected. Platts willcontinue to monitor typical fuel oil trades in the Mediterranean withthe assessment normalized in line with the specifications above.Platts currently normalizes its assessment to 0.995 SG and 420 cstquality. Comments please to vanessa ronsisvalle@platts.com andsimon thorne@platts.com with a CC to peter stewart@platts.comand jorge montepeque@platts.com Platts assesses FOB and CIF cargo market independently.
Strength in Mediterranean cargoprices
Bunker fuel strength relative toLSFO
Strength in Med prices: thereasons Increased demand in to Syria Refinery maintenance in Europe Strength in Singapore and Middle Eastbunker markets Change in specification that Plattsnormalizes to
FOB vs CIF differential At present Platts assesses FOB and CIF cargo pricingindependently – the differential between the two assessments istherefore not fixed by freight Since January 1, 2007 FOB oil has consistently been assessed at arelatively higher price to CIF oil than freight would suggest General consensus developing in the market that Platts shouldassess the CIF market and to fix the FOB assessment as a freightnetback based on Platts tanker assessments Platts assesses the CIF price in the gasoil and ulsd markets. CIFassessments allow transactions to occur where the origin of the oil isnot specific. Oil can be sold in to a CIF bid from Northwest Europe,the Black Sea, Spain or theoretically anywhere in the world.
Platts Mediterranean bunker fuelcoverage
Close to record high prices inGreece
Specifications Guideswww.platts.com
FUEL OIL SUBSCRIBER NOTE: Following industry feedback, Platts will from January 2, 2007 reflect bunker quality fuel oil in its high sulfur fuel oil 3.5% sulfur FOB and CIF Mediterranean assessments, in line with prevailing market trends. A specific gravity of 0.991 mg/kg and a viscosity of 380 centistokes will be reflected. Platts will
