OPIS450 Assessment Methodology

Europe Jet, Middle Distillates and Diesel Marine Fuel

OPIS450 Assessment Methodology — Europe Jet, Middle Distillates and Diesel Marine Fuel

OPIS450 is a way of pricing oil products based on their live value. OPIS450 pricing is assessed by taking the average of 450 one-minute price marks assessed for each of the 450 minutes between 9am and 4.30pm London time. This pricing assessment provides a real choice to those contracting for long-term supply or trading in the European spot market. It’s based, not on cargo trading, but on the more liquid and accessible barge trade in and around Rotterdam. This market is well-supplied and is traded by both suppliers and end-users.


JET | DIESEL MARINE FUEL (DMA) | ULSD | 50ppm GASOIL | 1000ppm GASOIL


OPIS450 ASSESSMENT OF REAL-TIME VALUE

Before the start of each trading day, a differential value for product barges will be published in OPIS market reports and price tickers.

This will remain the prevailing value used for assessment that day until there is new market information.

The differential value will change throughout the day when there is a higher bid seen, or a lower offer, or a trade.

Example: the published differential value is $30, based on yesterday’s closing value. A broker then posts a real-time bid of $30.50 on the third-party screen prior to 9am London time. At 9am the OPIS450 begins with that differential value of $30.50. The value used for assessment will stay at $30.50 until there is a higher bid, or a lower offer, or a new trade.

In order to capture real-time bids, offers, and trades, OPIS has linked to a third-party trading screen known as the OPIS450 Barge Market, which is hosted on the Trayport trading platform.

OPIS will publish all differential values relative to the front month LS Gasoil future, and will translate any differential based on a second month future into a differential versus the front month future at that time. In the event of a crossover between a port-specific bid and offer, OPIS will use the offer for assessment purposes.

Example: the jet barge market is bid for jet at $19/ton Rotterdam/Amsterdam for 2,000 tons, and offered at $18.50 at the same ports for 2,000 tons. The offer sets the value.

A port-specific offer should not pass lower than a bid with matching port requirements but different volumes without testing the bid.

Example: the jet barge market is offered at $19 Rotterdam for 3,000 tons, and bid at $19 FARA for 2,000 tons. The seller should test the bid before being able to offer lower.

New bids and offers should be placed sequentially, with guidance of $1 increments to the current differential value that is setting the index.

All bids and offers on screen must be executable in real-time.

In the event of a trade, the buyer or seller should firstly test the repeatability of the deal at the same differential value, or draw back to a lower differential bid or higher differential offer. After testing the repeatability of the trade, the buyer can issue a lower differential bid and the seller can issue a higher differential offer.

Companies should inform OPIS of credit or trading restrictions they have with other companies that are using the OPIS450 screens on Trayport. This may lead to pricing data being disregarded if a counterparty is considered unable to trade.

Standard industry nomination and pricing procedures apply.

Inability to execute a bid or offer posted on the Trayport screen must be flagged to OPIS.

Editors will also be able to manually input bids, offers and trades from other third party sources if the information is deemed live, executable and seen by a wide number of market participants.

After 4.30pm, editors will review the data from Trayport and may remove bids, offers or trades that are regarded out of kilter with market value, and have noticeably altered the assessment of the average differential.

OPIS Editors will monitor screen trading during the trading session and publish intraday market updates.

Back to Top


RE-ASSESSMENT

(From the market consultation culminating on September 2, 2019) On days when there has either been no market activity on the OPIS450 Market on Trayport or when posted bids and offers have not crossed the threshold of the previous overnight indicator, thereby failing to establish a new value for the day, OPIS editors may re-assess the value of OPIS450 jet.

In such circumstances, OPIS will refer to the structure of the forward curve to set a reference value for the day. Valid bids and offers which crossed this reference threshold during the day in question will establish a new price. In order to be considered in a re-assessment, such bids and offers must still be on-screen at the close of the trading session.

The bid and offer values will be taken from the time they appeared on the screen until the close. Prior to the appearance of bids and offers, the assessment will reference the threshold extrapolated from the forward swaps curve.

Example

The overnight indicator has been set at $40.00 the previous evening and becomes the opening value the next day.

No activity is seen on-screen to cross the threshold of this ‘last’ value.

The editor undertakes a re-assessment by drawing the curve from the forward two months of swaps, and creates a reference value, rounded to the nearest 25 cents as a basis for validating any bids and offers from the day.

The reference value is calculated to $34.23 and rounded to $34.25. This value will now be considered to be the opening value of the re-assessed trading session.

The editor reviews bids and offers and notes that an early bid is still active at the close and will therefore be considered in the re-assessment.

The editor sees the bid posted at $35.00 at 9.05 a.m., and increased to $36.00, at 10 a.m. 

The first five minutes of the day’s market are assessed at the reference value of $34.25. 

From 9.05 a.m. to 10 a.m. the market is assessed at $35.00.

From 10 a.m. to the close, the market is assessed at $36.00.

The spreadsheet uses each of the resulting minute values to create the day’s OPIS450 average price assessment. In this case, the assessment of the day would be $35.86. 

The following morning, buyers and sellers can again start bidding on the OPIS450 Market on Trayport at 8.45 a.m. U.K. time to establish value for the 9 a.m. start.

The reference value, rounded to the nearest 25 cents, will be calculated using the gradient of the forward curve between the front two months of the outright value of the jet barge swap. This straight line will be drawn backwards to the mid-point of the prompt-loading barge dates which OPIS assesses. It is this value which will serve as the reference value for re-assessing the validity of any bids and offers.

The sequence of bids and offers and the timing of any changes to indications will be calculated in an OPIS450 re-assessment spreadsheet. The spreadsheet may be requested by emailing opis450consult@opisnet.com for review on the day in question.

To establish the swaps curve, traders and brokers can report confirmed traded jet north European cargo deals, and jet barge/cargo paper deals at the close of business of OPIS450. OPIS will also accept relevant swaps traded via a screen when the data is available, if such can be verified. Without verified data, OPIS will refer to publicly reported indicated swaps values. Without clarity of data or indicated swaps values, OPIS will consider jet barge paper value as being $2/ton below the indicated value of jet cargo paper.

The balance month swap will roll forward on the day of expiry of the front month Low Sulfur Gasoil future.

Back to Top


ELECTRONIC PLATFORMS AND DATA FEEDS

OPIS450 relies on two electronic trading platforms. In the event of an interruption to the electronic feed from Trayport, brokers will be asked to send live bids and offers to OPIS’s editors, and these values will then appear on OPIS450 Product Tickers and be used in the day’s assessment.

In the event of an interruption to the ICE Futures feed, OPIS will publish the average of the differential moves and the LS Gasoil settle as the OPIS450 Assessment.

Back to Top


OPIS450 JET BARGE ASSESSMENT

The OPIS450 Jet Barge Assessment reflects the real-time value of prompt-loading jet fuel in the ports of Flushing, Antwerp, Rotterdam, Amsterdam and Ghent (FARAG) between 9am and 4.30pm London time. The closing time will be 12.30pm during certain holiday periods listed in the OPIS Holiday Schedule when oil product markets cease trading at lunchtime.

The assessment is based on 2,000 to 3,000 metric ton FOB barges, loading 3-7 days forward on Monday and Tuesday, and 5-9 days forward on Wednesday, Thursday and Friday. Loading times may be changed to allow trade during unusual trading conditions. The specification is Jet A1, Defstan 91-91 latest issue, 0.800 specific gravity, EU qualified.

(From the market consultation culminating on 22 July, 2019) OPIS requires buyers and sellers to nominate a minimum of two ports and must include one of the following port pairings: Antwerp and Rotterdam, Rotterdam and Flushing or Antwerp and Flushing.

Product differentials traded on a third-party trading platform are used in the assessment process. Live prices can be followed on the OPIS450 Europe Jet Ticker, before an evening assessment is made and published each product trading day in the OPIS Europe Jet, Diesel & Gasoil Report.

For mark-to-market and index pricing purposes, three prices will be published: an outright OPIS450 price, an OPIS450 differential, and a composite of the OPIS450 and the ICE Futures LS Gasoil Settlement price.

Back to Top


OPIS CIF JET CARGO ASSESSMENT

In addition to the barge assessments, OPIS will publish jet cargo prices based on 30,000 tons delivered into the ports of either Rotterdam and/or Le Havre, arriving in 10-30 days’ time.

There are two prices.

Firstly, the price versus the average of LS Gasoil Futures between 9am and 4.30pm London time (OPIS450 LS Gasoil), and secondly, the price versus the LS Gasoil ICE Settlement at 4.30pm London time.

The first of these prices will be published in the OPIS450 Europe Jet Price Summary (including when this is appended to the OPIS Europe Jet, Diesel & Gasoil Report). The second price is published as normal with OPIS’s other legacy jet fuel assessments on page 1 of the aforementioned report.

Values will be assessed from information provided by brokers and traders during the day. OPIS will also publish netback prices for Mediterranean and the Arab Gulf jet fuel, based on daily freight assessments. The netbacks will be based on the OPIS450 Jet Barge Assessment.

Back to Top


OPIS450 JET MARKET MINIMUM CONTRACT TERMS

The contract for a jet barge trade conducted on the OPIS450 Jet Barge Market screen on the Trayport Trading Platform should adhere to the following minimum contract provisions, developed and developing in consultation with spot market actors.

  1. Seller: …………………
  2. Buyer: …………………
  3. Product: Jet A1.
  4. Quality: Meeting the specification of Defstan and JFSCL latest issues (incl. Stadis 450 if already added at supply source).
  5. Quantity: …………… metric ton +/- 5% in buyer’s option.
  6. Delivery/Delivery period: FOB one safe berth … during the period …. thru …
  7. Nomination procedure: as per applicable GT and C’s.
  8. Price: price per metric ton basis at a specific gravity of 0.800 at 15 degrees C air/air or vacuum/vacuum shall be: US$ ….……… above the price of ……………. ICE gasoil futures to be exchanged to the nearest 100 metric tons as part of this contract.
  9. 9.1. Payment: 5 calendar days after Bill of Laden date.
    9.2. Credit Terms: As per existing credit terms and conditions between Buyer and Seller.
  1. Determination of Quality/Quantity: As per Seller’s applicable General Terms and Conditions (GT & Cs).
  2. Laytime/Demurrage: According to TTB rules unless otherwise agreed between Buyer and Seller.
  3. Other: Where not in conflict with the above then mutually agreed GT & Cs, incorporating any requested and approved amendments shall apply.

Please note:

  1. Ops. contact Seller: …………
  2. Ops. contact Buyer: …………

Back to Top


OPIS450 DMA BARGE ASSESSMENT DYED AND OPIS450 DMA BARGE ASSESSMENT UNDYED

From Summer 2017, the OPIS450 DMA Barge Assessments reflect the real-time value of prompt-loading Diesel Marine Fuel A in the ports Antwerp, Rotterdam, Amsterdam (ARA) between 9am and 4.30pm London time. The closing time will be 12.30pm during certain holiday periods listed in the OPIS Holiday Schedule when oil product markets cease trading at lunchtime.

The assessment is based on 1,000 to 3,000 metric ton FOB barges (plus or minus 5% in buyer’s option), loading 3-7 days forward on Monday and Tuesday, and 5-9 days forward on Wednesday, Thursday and Friday. Loading times may be changed to allow trade during unusual trading conditions. The specification is DMA ISO8217 v 2010. OPIS will publish both a dyed and an undyed DMA assessment.​

OPIS requires buyers to nominate a minimum of two ports from the ports of Antwerp, Rotterdam and Amsterdam when bidding for prompt loading Marine Diesel barges on the OPIS450 screen from Trayport. Sellers must specify a single port when posting offers.​

​Product differentials versus either the front or second month ICE Low Sulfur Gasoil future are used in the assessment process. ​

​Traders should nominate either EFP or Trigger or EFP/Trigger as their option on the OPIS450 stack on the Trayport platform.  A bid referencing EFP/Trigger will be in the seller’s option, and an offer referencing EFP/Trigger will be in the buyer’s option. ​

​Trigger or EFP trades will be concluded per metric ton in U.S. dollars below/above or equal to the price of either front or second month ICE Low Sulfur Gasoil futures to be exchanged to the nearest 100 metric tons see minimum contract details. ​

​For mark-to-market and index pricing purposes, for each of the dyed/undyed products, three prices will be published: an outright OPIS450 DMA price, an OPIS450 differential, and a composite of the OPIS450 and the ICE Futures LS Gasoil Settlement price.​

Back to Top


OPIS450 DMA MARKET MINIMUM CONTRACT TERMS

The contract for a DMA barge trade conducted on the OPIS450 DMA Barge Market screen on the Trayport trading platform should adhere to the following minimum contract provisions, developed and developing in consultation with spot market actors.

1. Seller: …………………

2. Buyer: …………………

3. Product: Diesel Marine Fuel A.

4. Quality: Gasoil 0.1 DMA (0.890 dens) ISO 8217:2010.

5. Quantity: …………… metric ton +/- 5% in buyer’s option. Escalation/ de-escalation to apply arithmetically based on actual density at 15 (fifteen) deg. c. versus density
at 15 (fifteen) deg. C. of 0.800 always consistent with bill of lading measurement (air/air or vacuum/vacuum).

6. Delivery/Delivery period: FOB FOB Amsterdam / Rotterdam / Antwerp. One safe berth … during the period …. thru …

7. Nomination procedure: as per applicable GT and C’s.

8. Trigger or EFP where price per metric ton basis shall be: US$….……… below/above the price of ……………. ICE gasoil futures to be exchanged to the nearest 100 metric tons as part of this contract.​

9.1. Payment: 5 calendar days after Bill of Laden date.

9.2. Credit Terms: As per existing credit terms and conditions between Buyer and Seller.

10. Determination of Quality/Quantity: As per Seller’s applicable General Terms and Conditions (GT & Cs).

11. Laytime/Demurrage: According to TTB rules unless otherwise agreed between Buyer and Seller.

12. Other: Where not in conflict with the above then mutually agreed GT & Cs, incorporating any requested and approved amendments shall apply.

Please note:
a. Ops. contact Seller: ……………
b. Ops. contact Buyer: ……………

Back to Top


OPIS450 ULSD BARGE ASSESSMENT

From Summer 2017, the OPIS450 ULSD Barge Assessments reflect the real-time value of prompt-loading ultra-low sulfur diesel in the ports Antwerp, Rotterdam, Amsterdam (ARA) between 9am and 4.30pm London time. The closing time will be 12.30pm during certain holiday periods listed in the OPIS Holiday Schedule when oil product markets cease trading at lunchtime.

The assessment is based on 1,000 to 3,000 metric ton FOB barges (plus or minus 5% in buyer’s option), loading 3-7 days forward on Monday and Tuesday, and 5-9 days forward on Wednesday, Thursday and Friday. Loading times may be changed to allow trade during unusual trading conditions. The quality is German specification diesel with a maximum sulfur content of 10ppm. The typical density is basis 0.845 kg/l (actual specific gravity ranges from 0.82 to 0.845 kg/l).

OPIS will set out a schedule for changing the seasonal specification of ULSD for winter, intermediate and summer grades through seasonal market announcements.  The dates may vary from year-to-year.

Product differentials traded on a third-party trading platform are used in the assessment process.

For mark-to-market and index pricing purposes, OPIS will publish an outright OPIS450 ULSD barge price, an OPIS450 ULSD differential, and a composite of the OPIS450 ULSD differential and the ICE Futures LS Gasoil Settlement price.

Back to Top


OPIS450 ULSD MARKET MINIMUM CONTRACT TERMS

The contract for a ULSD barge trade conducted on the OPIS450 ULSD Barge Market screen on the Trayport trading platform should adhere to the following minimum contract provisions, developed and developing in consultation with spot market actors.

1. Seller: …………………

2. Buyer: …………………

3. Product: Ultra-Low Sulfur Diesel.

4. Quality:

5. Quantity: …………… metric ton +/- 5% in buyer’s option.

6. Delivery/Delivery period: FOB FOB Amsterdam / Rotterdam / Antwerp. One safe berth … during the period …. thru …

7. Nomination procedure: as per applicable GT and C’s.

8. Trigger or EFP where price per metric ton basis shall be: US$….……… below/above the price of ……………. ICE gasoil futures to be exchanged to the nearest 100 metric tons as part of this contract..

9.1. Payment: 5 calendar days after Bill of Laden date.

9.2. Credit Terms: As per existing credit terms and conditions between Buyer and Seller.

10. Determination of Quality/Quantity: As per Seller’s applicable General Terms and Conditions (GT & Cs).

11. Laytime/Demurrage: According to TTB rules unless otherwise agreed between Buyer and Seller.

12. Other: Where not in conflict with the above then mutually agreed GT & Cs, incorporating any requested and approved amendments shall apply.

Please note:
Trigger period from –/–/– to –/–/–
a. Ops. contact Seller: ……………
b. Ops. contact Buyer: ……………

Back to Top


OPIS450 50ppm GASOIL BARGE ASSESSMENT

From Summer 2017, the OPIS450 50ppm Gasoil Barge Assessments reflect the real-time value of prompt-loading 50ppm gasoil in the ports Antwerp, Rotterdam, Amsterdam (ARA) between 9am and 4.30pm London time. The closing time will be 12.30pm during certain holiday periods listed in the OPIS Holiday Schedule when oil product markets cease trading at lunchtime.

The assessment is based on 1,000 to 3,000 metric ton FOB barges (plus or minus 5% in buyer’s option), loading 3-7 days forward on Monday and Tuesday, and 5-9 days forward on Wednesday, Thursday and Friday. Loading times may be changed to allow trade during unusual trading conditions. The quality is German specification heating oil with a maximum sulfur content of 50ppm. The typical density is basis 0.845 kg/l.

Product differentials traded on a third-party trading platform are used in the assessment process.

For mark-to-market and index pricing purposes, OPIS will publish an outright OPIS450 50ppm Gasoil price, an OPIS450 50ppm Gasoil differential, and a composite of the OPIS450 50ppm differential and the ICE Futures LS Gasoil Settlement price.

Back to Top


OPIS450 50ppm GASOIL MARKET MINIMUM CONTRACT TERMS

The contract for a 50ppm gasoil barge trade conducted on the OPIS450 50ppm Gasoil Barge Market screen on the Trayport trading platform should adhere to the following minimum contract provisions, developed and developing in consultation with spot market actors.

1. Seller: …………………

2. Buyer: …………………

3. Product: 50ppm gasoil.

4. Quality:

5. Quantity: …………… metric ton +/- 5% in buyer’s option.

6. Delivery/Delivery period: FOB FOB Amsterdam / Rotterdam / Antwerp. One safe berth … during the period …. thru …

7. Nomination procedure: as per applicable GT and C’s.

8. Trigger or EFP where price per metric ton basis shall be: US$ ….……… below/above the price of ……………. ICE gasoil futures to be exchanged to the nearest 100 metric tons as part of this contract..

9.1. Payment: 5 calendar days after Bill of Laden date.

9.2. Credit Terms: As per existing credit terms and conditions between Buyer and Seller.

10. Determination of Quality/Quantity: As per Seller’s applicable General Terms and Conditions (GT & Cs).

11. Laytime/Demurrage: According to TTB rules unless otherwise agreed between Buyer and Seller.

12. Other: Where not in conflict with the above then mutually agreed GT & Cs, incorporating any requested and approved amendments shall apply.

Please note:
Trigger period from –/–/– to –/–/–
a. Ops. contact Seller: ……………
b. Ops. contact Buyer: ……………

Back to Top


OPIS450 1000ppm GASOIL BARGE ASSESSMENT

From Summer 2017, the OPIS450 1000ppm Gasoil Barge Assessments reflect the real-time value of prompt-loading 1000ppm gasoil in the ports Antwerp, Rotterdam, Amsterdam (ARA) between 9am and 4.30pm London time. The closing time will be 12.30pm during certain holiday periods listed in the OPIS Holiday Schedule when oil product markets cease trading at lunchtime.

The assessment is based on 1,000 to 3,000 metric ton FOB barges (plus or minus 5% in buyer’s option), loading 3-7 days forward on Monday and Tuesday, and 5-9 days forward on Wednesday, Thursday and Friday. Loading times may be changed to allow trade during unusual trading conditions. The quality is gasoil heating oil grade with a specific gravity of 0.845 kg/l and with a maximum sulfur content of 0.1%
Product differentials traded on a third-party trading platform are used in the assessment process.

For mark-to-market and index pricing purposes, OPIS will publish an outright OPIS450 1000ppm Gasoil price, an OPIS450 1000ppm Gasoil differential, and a composite of the OPIS450 1000ppm Gasoil differential  and the ICE Futures LS Gasoil Settlement price.

Back to Top


OPIS450 1000ppm GASOIL MARKET MINIMUM CONTRACT TERMS

The contract for a 1000ppm gasoil barge trade conducted on the OPIS450 1000ppm Gasoil Barge Market screen on the Trayport trading platform should adhere to the following minimum contract provisions, developed and developing in consultation with spot market actors.

1. Seller: …………………

2. Buyer: …………………

3. Product: 1000ppm Gasoil.

4. Quality:

5. Quantity: …………… metric ton +/- 5% in buyer’s option.

6. Delivery/Delivery period: FOB FOB Amsterdam / Rotterdam / Antwerp. One safe berth … during the period …. thru …

7. Nomination procedure: as per applicable GT and C’s.

8. Trigger or EFP where price per metric ton basis shall be: US$ ….……… below/above the price of ……………. ICE gasoil futures to be exchanged to the nearest 100 metric tons as part of this contract..

9.1. Payment: 5 calendar days after Bill of Laden date.

9.2. Credit Terms: As per existing credit terms and conditions between Buyer and Seller.

10. Determination of Quality/Quantity: As per Seller’s applicable General Terms and Conditions (GT & Cs).

11. Laytime/Demurrage: According to TTB rules unless otherwise agreed between Buyer and Seller.

12. Other: Where not in conflict with the above then mutually agreed GT & Cs, incorporating any requested and approved amendments shall apply.

Please note:
Trigger period from –/–/– to –/–/–
a. Ops. contact Seller: ……………
b. Ops. contact Buyer: ……………

Back to Top


OPIS IS AN IOSCO COMPLIANT PRICE REPORTING AGENCY

OPIS was one of the initial signatories of the International Organization of Securities Commissions (IOSCO) voluntary compliance standards for Oil Price Reporting Agencies (PRAs).

OPIS retains PricewaterhouseCoopers LLP to audit our systems, processes and pricing assessments to make sure we are 100% compliant with the IOSCO standards. Now in our fourth year of independent auditing of our key benchmarks, we are once again extremely proud to say that OPIS spot price assessments conform to the Principles for Oil Price Reporting Agencies as established by IOSCO.

More detail on OPIS’s Global Compliance Strategy and the IOSCO Principles can be found here.

We trust that the above reflects your understanding of the transaction. If in disagreement with any of the above please advise by return email to OPIS Vice President of Strategic Content, Steve Tan, at steve.tan@ihsmarkit.com or +1-301-284-2138.