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GENERAL TERMS AND CONDITIONS METHODOLOGY GUIDE GENERAL TERMS AND CONDITIONS TIME OF ASSESSMENT Platts European products assessments reflect the transactable value prevailing at 16.30:00 London time precisely. The assessment methodology reflects values on a market-on- close basis. Trading activity, including bids/offers and transactions, is covered during the typical operating hours of the European markets with market values determined precisely at 16.30:00 London time. Platts tracks outright and spread levels through the day between 08.30:00-16.30:00 London time and these levels may have a bearing on final assessment levels, depending on transparency and the patterns of liquidity over the day. Transactions and activity in futures, physical or derivatives markets before 08.30:00 and after 16.30:00 London time are not taken into account. All market activity is viewed in light of its market relevance, repeatability and transparency. Transactions between related parties or transactions that do not meet Platts high standards for transparency, verifiability and repeatability may not be taken into account. Platts European products assessments have reflected the transactable value prevailing at 16.30:00 London time since October 1, 2005. Before that, from April 1, 2003, a 17.30:00 London time close was reflected. BIDS/OFFERS Platts considers transactions, bid/offer levels and market indications that are reflective of typical conditions and originating from sources deemed reliable. Details of bids/offers and deals for European oil products are provided on Platts electronic screen service Platts Global Alert on PGA005. Bids and offers must in principle be open to any reputable and creditworthy counterparty. Platts will exclude transactions, bids/offers or any market indications when these appear to be unrepresentative of the market, or unrepeatable. Deals done below the level of prevailing bids or above the level of prevailing offers (i.e., selling through the bid or buying through the offer) will not be reflected in Platts assessments. More comprehensive details of the procedures for bidding and offering on PGA005 are provided in a separate documnent “Platts Editorial Guidelines and Methodologies: European Oil Products”. The web URL for this document is: http://www.platts.com/Oil/Resources/Methodology%20&%20Spe cifications/europeanoilproductspecsguideline.pdf?S=n EUROPEAN PRODUCTS 2 EXECUTABILITY Platts only takes into account bids and offers where trading participants have demonstrated that those bids and offers are firm and executable. For the purposes of its assessments, Platts will only consider in its assessment process bids and offers that heve been communicated to reporters/price specialists before 15.45:00 London time for cargoes, 16.00:00 for barges and 16.15:00 for swaps. Any new bid/offer submitted later than these cutoffs will not be considered in the assessment process. Platts considers in its assessment incremental price changes made to applicable bids or offers up to but no later than 16.28:00 London time, after which only deals will be considered. Platts takes into account bids/offers that are executable under normal circumstances. Where provisions in the bid or offer make it difficult or impossible to execute, the bid or offer will not be considered in the assessment. Such provisions may include, for instance, non-standard nomination procedures and charter party or loading options outside the normal range of ports considered as standard in each market. PERFORMANCE Platts' editorial guidelines governing its assessment process require it must consider only those transactions, bids or offers where market participants perform under typical contractual terms. Platts accepts that individual companies may have trading limits with counterparties and that national legislation may prevent companies from dealing in materials of certain origins. Such counterparty issues will be dealt with on a case-by-case basis. Participants intending to sell should not offer when there is a known and distinct possibility that loading/delivery may be delayed. If congestion or delays prevent performance under the contractual terms, the seller should make reasonable and timely efforts to supply from an alternative source, or the seller should engage in other measures to alleviate the buyers' exposure. Equally, a buyer should not over-commit and then aggregate nominations in a way that m akes it logistically impossible for the seller to perfor m. Platts will take appropriate steps to ensure the integrity of its assessments if issues of non-performance should arise.
METHODOLOGY GUIDE GENERAL TERMS AND CONDITIONS QUALITY Platts products assessments are based on merchantable grades. For both cargoes and barges, no distinction is made between refinery and storage in terms of the origin of the material. Typical specifications for each product are detailed below. Bids/offers that exclude legitimate supply sources may be deemed restrictive and excluded from the assessment process. INCREMENTABILITY Price changes to bids and offers will be considered in the assessment process only if the improvements in the price of bids and offers are incremental in nature. Typically the increments considered would be of a maximum of $1/mt but this varies according to market conditions. Price changes made very rapidly, that do not allow a counterparty to execute, may be disregarded. Where related futures markets exhibit unusual volatility, Platts may increase the level of increment accepted without prior notice. Platts will typically advise such increment changes on PGA005 Please note that market participants may withdraw bids/offers at any point, provided no counterparty has expressed an intention to execute the bid/offer. Also market participants may back away from the price non-incrementally. REPEATABILITY Bids, offers and transactions are viewed against the broader supply/demand generated by those bids/offers and transactions. Hence if a low price offer generates too much demand, Platts may determine in its editorial process that the market value is higher than the level offered. Likewise if a high bid generates too much supply and the buyer is unable to buy all the volume that is offered, Platts in its editorial process may determine that that the market value is lower than the level bid. SPREADS Platts typically reflects fixed price deals, bids and offers in its assessments. Platts also uses bids/offers and transactions on a Platts related and EFP-related basis, for instance on middle distillates where bids/offers and deals are frequently concluded on an IPE-related basis. EUROPEAN PRODUCTS Platts may use additional indications as appropriate including the market value of spread relationships with other oil grades and associated markets such as derivatives and futures. In certain illiquid markets, it may establish FOB or CIF values based on freight differentials to more liquid benchmarks. 3 ICE GASOIL PRICES Platts publishes the ICE gasoil weighted average as well as the settlement prices for the first two futures months. Platts also publishes the settlements for the first six months of ICE futures trading, The figures reflect the values provided by the ICE rounded to the nearest 25 cts/mt and are not an assessment by Platts. Platts rolls the trading months on the day after expiry (i.e. on expiry day, the expiring front-month and the second-month futures contracts are carried in the assessment tables). Effective November 1, Platts started to reflect in its European middle distillate assessment processes the prevailing value of ICE gasoil futures at exactly 16:30 London time rather than the ICE settlements which reflect a three minute weighted average of transactions. Platts typically determines the fixed price value of transactions after taking into consideration the EFP differential and the Intercontinental Petroleum Exchange gasoil futures contract settlement levels. Platts has generally used ICE gasoil settlements and its assessment of the EFP premium in calculating the physical values for middle distillates since April 1, 2003. Before April 1, 2003, the ICE gasoil weighted averages were used. Please note, however, that while the prevailing values of ICE gasoil futures at exactly 16:30 London time are typically used in calculating physical values, Platts reserves the right to adapt or abandon this methodology if required. For instance, Platts may use alternative systems if in Platts opinion the prevailing values were to appear anomalous. On days when technical outages or other exigencies mean there is no ICE trade at 1630 London time, for instance because of technical problems, Platts' assessments will continue to reflect prevailing values at 16:30 London time. The outright distillate prices for cargoes and barges will be calculated using Platts' assessments of fixed price values at 16:30 London time as usual. Platts typically tracks both fixed price as well as inter-product and crude-to-product relationships prevailing at 16:30 London time. Please note that assessment timings may be changed due to a variety of reasons including power outages, communication problems or any other issue affecting the normal flow of information and/or business. Platts will make reasonable efforts to communicate to its subscribers the time resets.
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Page 27 and 28: PUAAM00 FUEL OIL 1% CARGOES FOB NWE
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METHODOLOGY GUIDE APPENDIX EUROPEAN
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DATA CODES METHODOLOGY GUIDE APPEND
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Barges FOB Rotterdam, 10 PPM Barges
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contractual terms, the seller shoul
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METHODOLOGY GUIDE ppm sulfur. This
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METHODOLOGY GUIDE 23-Jan-2006 Follo
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METHODOLOGY GUIDE APPENDIX VI: DISC
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METHODOLOGY GUIDE cargoes became 0.
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