FOB Straits Price Assessment

Every working day, Platts' experienced market reporters talk to a wide range of active market participants from across the industry, including producers, end-users, traders and brokers. Platts assessments take into account firm bids and offers that meet Platts rigorous editorial guidelines, with an open and transparent price discovery process, known as the Platts Market on Close assessment process, bringing trading information into sharp focus, and displaying it openly for every interested party to see.

Malaysian terminals in the Platts MOC process

Platts currently considers in its FOB Singapore MOC process deliveries made from three southern Malaysian oil terminals: Pasir Gudang and Tanjung Langsat to the north east of the city state, and Tanjung Bin, to the west of Singapore. South Malaysia has been part of the FOB Singapore benchmark since January 2001, when the storage terminal at Pasir Gudang was introduced as a delivery point for transactions concluded in the Platts Market on Close assessment process. Most recently, from May 1, 2015, Pengerang Terminal to the North East of Singapore will be included as a delivery point for the FOB Singapore MOC process.

Since the start of 2013, there have been 86 trades, totaling 9.17 million barrels, reported through the Platts MOC process on an FOB Malaysia basis across the fuel oil, gasoil, jet fuel and gasoline markets.

Relevance, repeatability and transparency

All market activity is viewed in light of its market relevance, repeatability and transparency. Platts FOB Singapore and FOB Straits assessments reflect the repeatable, transactable price at 16:30:00 Singapore time precisely.

Platts actively studies the evolution of the geographical coverage of its FOB Singapore refined oil products benchmarks to ensure they are well positioned to reflect growth in regional oil trading for years to come.

The limited possibility of further expansion of Singapore's on-land oil storage, coupled with growth plans in nearby Johor and the Riau Islands, means trading of products – and the benchmarks that reflect that activity – will spill beyond Singapore's traditional boundaries and into new frontiers.

Singapore's storage capacity is a key reason for the country's status as Asia's leading oil trading hub. Accessible tanks are a vital part of the oil trading business, providing the infrastructure for storing products, blending and distribution. They are a key tool for traders to manage oil supply in volatile and unpredictable markets.

But there is a limited possibility of further expansion of Singapore's on-land oil storage. Further growth of Singapore's storage terminal market is expected to be curtailed by limited waterfront land availability. Government authorities of the land-scarce city have indicated a shift in priority to the higher value chemicals manufacturing sector, and have said they will no longer allocate any land for oil storage. In fact, perhaps the last, major storage project in the city moved below ground; the Jurong Rock Caverns storage project is slated for completion in 2016.

Capitalizing on flows of oil to and from the Southeast Asian region, the Malaysian government has announced plans to build close to 10 million cu m of oil storage by 2020. The growth of storage terminals beyond Singapore raises the question as to whether to include regional terminals as part of the FOB Singapore oil benchmarks in a more integrated fashion.

From July 1, 2015, Platts will be moving from FOB Singapore to FOB Straits. As a result, Platts will no longer publish FOB Singapore or FOB Malaysia bids, offers or transactions in its Market on Close assessment process – it will only publish bids and offers and transactions as FOB Straits.