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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.
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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.