Specifications Guide Americas Refined Oil Products Latest update: September 2021 Definitions of the trading locations for which Platts publishes daily indexes or assessments 2 LPG/NGLs 6 Gasoline 14 Blendstocks 18 Naphtha 19 Jet fuel 23 Heating oil 27 Diesel 32 Fuel oil 36 Feedstocks 40 Lubes and asphalt 41 US futures 42 Revision history 43 www.spglobal.com/platts Specifications Guide Americas Refined Oil Products: September 2021 DEFINITIONS OF THE TRADING LOCATIONS FOR WHICH PLATTS PUBLISHES DAILY INDEXES OR ASSESSMENTS All the assessments listed here employ S&P Global Platts Platts understands that there are various public dock clauses The Platts assessment process determines the value of physical Assessments Methodology, as published at https://www. used in the spot market. In the event that terminal dates do not commodities for forward delivery or loading at a wide variety spglobal.com/platts/plattscontent/_assets/_files/en/our- meet the reported transaction laycan, the terminal party could of locations across the Americas. Many of these commodities methodology/methodology-specifications/platts-assessments- apply these clauses to extend demurrage liabilities for the vessel trade on an outright price basis – where the full price is known methodology-guide.pdf. party. For example, if a terminal date obtained was two days at time of trade -- or on a Platts-related, floating price basis – after the transaction laycan, and the vessel arrives within the where much of the value is determined in reference to reference These guides are designed to give Platts subscribers as much transaction laycan, the vessel party could be liable for those two prices that will be published in the future. Additionally, some information as possible about a wide range of methodology and days of demurrage under some public dock clauses. products are regularly traded as Exchange of Futures for specification questions. Physical contracts, where the difference in value between a Terminal parties for trades reported to Platts should ensure that physical market and a reference futures contract is an important This guide is current at the time of publication. Platts may they seek terminal dates that meet the reported transaction component in establishing the value of the physical market issue further updates and enhancements to this guide and will laycan. If the terminal party fails to obtain terminal dates that being assessed. announce these to subscribers through its usual publications meet the laycan, then the terminal party should bear the cost of of record. Such updates will be included in the next version of the extended demurrage. When the value of commodities is clearly defined through this guide. Platts editorial staff and managers are available to outright price market activity, such activity can help establish provide guidance when assessment issues require clarification. Explanation of EFPs: In the Americas, many physical refined value with a high degree of certainty. When there is a lack of products trade at a differential to an underlying oil futures outright price activity in a market, or when the most clearly Pipeline assessments: Platts US refined product pipeline contract: light sweet crude oil, New York Harbor RBOB gasoline defined market activity is being demonstrated on a floating price assessments reflect product specifications of the relevant barges or New York Harbor ULSD barges. The primary exchange basis, it becomes critical to track the value the market assigns pipeline, unless otherwise specified. These are updated used to date is the New York Mercantile Exchange (NYMEX). For to future, yet-to-be published Platts assessments. periodically by the pipeline companies and Platts assessments assessments to be robust and fully reflective of spot values, the reflect the latest specifications. values of both the EFP as well as the underlying futures value In derivatives markets, a Strip is any contiguous date series must be established at the same time. in the future. A “Summer Strip” might be April, May, June, July, Renewable identification numbers: Platts US domestic refined August and September. An “Annual Strip” would typically be 12 product assessments reflect the tradable value of products When analyzing bids, offers and expressions of interest to trade consecutive months. A Platts Strip is a sequence of days that in the spot market, which, for road transport fuels includes that are submitted as an EFP versus a futures contract (e.g. represent the future loading dates reflected in Platts oil product the cost of meeting renewable volume obligations (RVOs) July RBOB +$0.01/barrel), Platts will use the official NYMEX assessments. mandated by the Environmental Protection Agency. However, settlement price at 2:30 pm ET for the futures contract in this cost, represented by the spot market value of RINs, is question to calculate the flat price for the assessment. The Strip published by Platts for certain oil markets represents typically deducted from the value of export and import cargo the value the market assigns to future Platts assessments, assessments. Explanation of the Strip: Strips are assessed in certain US through trading in Platts-related, monthly derivatives. This value refined product markets, particularly fuel oil, to aid in the is determined by analyzing the derivatives market. Nomination procedures: For most FOB assessments, it is the assessment of market value. This explanation for the Strip seller, as terminal party, who nominates the terminal and loading describes how it is determined, and its application in Platts As financially settled contracts, derivatives derive their value date. For most delivered assessments, it is the buyer, as terminal assessment process. from published benchmark assessments. They do not entail party, who nominates the terminal and delivery date. physical delivery of oil. For example, if a 50,000 barrel June swap © 2021 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 2 31-Jul-13 29-Jul-13 27-Jul-13 25-Jul-13 23-Jul-13 21-Jul-13 19-Jul-13 Of Strip) 17-Jul-13 Value Of July Swap 15-Jul-13 Swap 13-Jul-13 s (And Last Day 11-Jul-13 nt $88.20/mt: Of Strip) 09-Jul-13 Value Of June 07-Jul-13 Assessme 05-Jul-13 (And First Day 03-Jul-13 In Platts (Mid point) 01-Jul-13 $88.50/barrel: Specifications Guide based on assessment is HSFO USGC Platts the an example, As the assessment. of date the from 7-15 days loading cargoes value the reflect assessments will the 31, May is today if Hence, 7-15. June during loading cargoes of those on market the derivatives value of is the Strip Platts The of the mid-point this particular in example, days; assessment June 11. period is the assessed 29-Jun-13 Assessments Reflected 27-Jun-13 Day Assessment 25-Jun-13 or Platts minus $0.11/barrel In Platts 23-Jun-13 21-Jun-13 Last Loading Reflected 19-Jun-13 15: $88.43/barrel, Value Of Physical Day 17-Jun-13 June 15-Jun-13 oading Day tL 13-Jun-13 Firs Strip) Assessments 11-Jun-13 7: 09-Jun-13 June In Platts Of MOPS 07-Jun-13 Middle Loading 11: 05-Jun-13 03-Jun-13 Reflected (Midpoint June 01-Jun-13 88.80 88.70 88.60 88.50 88.40 88.30 88.20 88.10 88.00 ILLUSTRATION OF THE STRIP THE OF ILLUSTRATION published when there is a vibrant derivatives market to serve as serve to market derivatives a vibrant is when there published analysis. basis for the the Platts-related for value proxy as a hedgable standing By essential to Strip is the price cargo, a floating of element traded is that a cargo value of equivalent the flat-price defining assessment. the Platts to or discount a premium as 3 Americas Refined Oil Products: September 2021 September Products: Oil Americas Refined premiums or discounts to the Platts assessment itself. It is assessment itself. the Platts to or discounts premiums physical cargoes trade at both fixed-price levels, and as levels, fixed-price both at trade cargoes physical Platts therefore publishes a Platts Strip in markets where where markets Strip in a Platts publishes therefore Platts use the same Platts reference price for final settlement. for price reference Platts the same use analyzed, and the floating price physical contract being valued, being valued, contract price physical the floating and analyzed, from derivative markets, so long as the derivative being the derivative as so long markets, derivative from relevant Platts assessments of the future can be extrapolated can be extrapolated the future assessments of Platts relevant delivered and priced in the future, a hedgable, proxy value for the for value proxy hedgable, a the future, and priced in delivered can never be known at the time of trading a cargo that will be that cargo a trading of the time at be known can never reserved. rights All Inc. Global S&P of a division Platts, Global S&P © 2021 While the value that Platts will publish in its assessments will publish in Platts value that the While cargoes when they are regularly traded on a floating price basis. basis. price on a floating traded regularly are they when cargoes component in fully analyzing the price determination of physical physical of determination the price analyzing fully component in future value for the Platts assessments, and it is an importantit is an and assessments, the Platts for value future common. The strip represents an underlying, market-assigned market-assigned an underlying, represents The strip common. value of the physical market, when floating price trading is trading price when floating market, the physical value of The Platts Strip is used as a component in measuring the a component used as Strip is The Platts location and trading terms.