OPIS Introduces a Temperature Corrected Assessment
OPIS, an IHS Markit company and the leading provider of wholesale spot and rack pricing information to the U.S. and international community, is adding “a temperature corrected assessment” to its portfolio of pricing data and options available to customers.
Starting Oct. 3, OPIS customers will be able to receive on a daily basis a PDF file, the “OPIS Temperature Correction Assessment Report,” that will detail in U.S. cents per gallon the increment of adjustment buyers and sellers of gasoline and diesel fuel need to make to normalize prices taking into account volumetric expansion or contraction of gallons based on temperature.
The physical volume of petroleum products expands and contracts as the temperature changes. Hot weather expands volume; cold weather shrinks volume. To normalize the expansion or contraction of gallons to 60 degrees Fahrenheit — the industry-defined reference temperature at which gross gallons and net gallons are exactly the same — OPIS introduces its Temperature Correction Assessment Report.
OPIS is the first Price Reporting Agency (PRA) to add this new pricing component to help petroleum suppliers and customers navigate potential swings in volume as temperatures fluctuate. Our goal is to provide a third-party, independent assessment index to help buyers and sellers normalize prices against volumetric gains or losses due to temperature variation.
Customers all along the petroleum supply chain from refiners to suppliers to marketers to consumers can benefit from this report. The OPIS temperature correction value will be of particular benefit to rack buyers and sellers using spot formula index deals as a pricing mechanism.
The OPIS Temperature Correction Assessment will be by product by location for gasoline and diesel fuel at all northern cities in Colorado, Connecticut, Delaware, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.
OPIS will use the average ambient temperature between the previous day’s high and low temperatures from weather stations at the airport nearest the city that is assessed with the temperature correction value. In all cases the airports are within 30 miles of the terminal.
The previous day’s price data source is the OPIS Contract Average and the volumetric correction factor is based on product gravity at 60 degrees Fahrenheit.
Reports are available Monday through Saturday at 9 a.m. ET and all northern cities currently included in the PDF format may be selected in .csv or custom formats.
The OPIS Temperature Correction Assessment is an independent, third-party calculation for the expected cents per gallon cost of correcting the price based on the volume of product dispensed.
“We are pleased to take this step and add this important index to our spot and rack pricing options,” said Brian Crotty, OPIS president and CEO.
“We created this pricing component as a third party assessment offering transparency and visibility into the temperature correction process,” said Tanya Lee, director of OPIS Rack Pricing.
Get a free preview of the OPIS Temperature Correction Assessment Report for 10 days. Go here to learn more and begin your trial.
For more information, contact:
Director of Rack Pricing, OPIS