Largest German Airline Lufthansa Agrees on Deal on OPIS450 Jet Fuel Prices
June 23, 2017

Germany's biggest airline, Deutsche Lufthansa, said today that it has agreed on a long-term contract using OPIS450 pricing for jet fuel.

The jet fuel contract is a long-term deal of "substantial volume," greater than 500,000 cubic meters/year, or approximately 388,000 metric tons/year, according to Lufthansa. The contract is based on the OPIS450 jet fuel differential plus the relevant low sulfur gasoil futures settlement on the Intercontinental Exchange.

OPIS450 is an innovative tool that calculates the average price of jet fuel barge cargoes in the ports of Flushing, Amsterdam, Rotterdam, Antwerp and Ghent at every minute of the day from 9 a.m. to 4:30 p.m. London time, a total of 450 minutes. Live bids, offers and trades are fed through to OPIS through a trading screen from Trayport, a technology company owned by the Intercontinental Exchange.

The effect of the OPIS450 is to capture peaks and valleys of oil volatility throughout the day, rather than just a single price at 4:30 p.m. London time, when the low sulfur gasoil futures prices settle. OPIS450 takes into account OPIS' well-known full-day pricing methodology while offering complete market transparency for anyone wanting to price jet fuel.

Lufthansa was founded in 1953 and, in combination with its subsidiaries, is the biggest airline in Europe in terms of fleet size, and the second-largest airline in terms of passengers carried last year.

- Rob Sheridan, rsheridan@opisnet.com

Copyright, Oil Price Information Service

Using a live trading platform, the OPIS450 Europe Jet Ticker converts bids, offers and deals in the barge jet fuel market into a price mark for each minute between 9:00 a.m. and 4:30 p.m. London time.

The average of those 450 prices creates a representative mean value for the entire trading day, providing carriers and suppliers with an impartial market assessment.

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