[OIL ] 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