North Sea sulfur de-escalator METHODOLOGY AND SPECIFICATIONS GUIDE (Latest Update: October 2014) OIL

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METHODOLOGY AND SPECIFICATIONS GUIDE
North Sea sulfur de-escalator
(Latest Update: October 2014)
METHODOLOGY AND SPECIFICATIONS GUIDE
Platts to maintain Forties de-escalator at $0.25/b
on Nov 1, 2014
On October 24, 2014, Platts announced that the sulfur de-escalator to
be effective November 1, 2014, in Forties cargoes and related instruments
in the Platts MOC process would be $0.25/barrel per 0.1% weight of sulfur
over the 0.6% wt standard.
This was unchanged from the previous de-escalator value,
which has been in place since the beginning of October, 2014. The
de-escalator should apply to cargoes loading from November 1, 2014.
Platts considers a number of indicators in the determination of the
Forties de-escalator level including the behavior of sweet and light crudes
versus sourer and heavier streams in the North Sea and other competing
regions as well as the performance of refined products, and the outright
North Sea sulfur de-escalator: OCTOBER 2014
price of crude oil.
The latest review of the key indicators showed a balanced range of
movements in several of the key indicators.
The diesel/gasoil spread widened for another month, increasing by
around 30% from end-September to end-October. At the same time, the
naphtha/high-sulfur fuel oil spread narrowed, coming in to $239.25/mt on
October 22 from $298.25/mt on September 22.
Other sulfur indicators, such as the fuel oil hi-lo differential, showed
little change on the month but remained in relatively weak territory.
On the crude side, the North Sea grade Oseberg to Russian grade
Urals was largely uncaged in October compared to September. By October
22, the Oseberg/Urals differential was $3.305/b; a month previously it had
been $3.15/b and it remains in historically weak territory.
In terms of medium-sour/sour comparisons, the Forties/Urals spread
$/b
$/b
picked up slightly towards the end of October, having dropped sharply
towards the end of the previous month.
In a month-on-month comparison, the outright price for crude oil
continued to fall.
While the outright price of Dated Brent and some factors within
the crude or product spheres suggested a stable to weaker Forties
sulphur de-escalator, several other indicators showed stronger
differentials for low-sulfur crudes or products over their higher-sulfur
peers. As such, Platts maintained the de-escalator at its current level
and will continue to review how these factors evolve in the coming
month.
The following tables illustrate key data discussed above. Platts
welcomes all comments and questions at [email protected] and
[email protected].
$/b
$/b
0.4
0.4
8
110
0.3
6
0.3
100
0.2
4
0.2
0.1
2
0.0
0
Oct-13
120
90
Dated Brent
De-escalator
80
Oct-13
Dec-13
Feb-14
Apr-14
Jun-14
Aug-14
Oct-14
Dec-13
Feb-14
Apr-14
Jun-14
Aug-14
Oct-14
0.0
Data: Platts assessments
Data: Platts assessments
35
0.1
FOB Oseberg/FOB Urals (Primorsk)
De-escalator
$/mt
$/b
$/mt
$/b
0.4
400
0.4
0.3
350
0.3
0.2
300
0.2
0.1
250
0.0
200
Oct-13
30
25
20
15
ULSD–gasoil
De-escalator
10
5
Oct-13
Dec-13
Feb-14
Apr-14
Jun-14
Aug-14
Oct-14
Data: Platts assessments
Dec-13
Data: Platts assessments
COPYRIGHT © 2014 BY PLATTS, McGRAW HILL FINANCIAL
2
0.1
Naphtha-HSFO
De-escalator
Feb-14
Apr-14
Jun-14
Aug-14
Oct-14
0.0