[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]
RE: FpML-Com 2009-05-08 Minutes
Ultimately, it seems the source of various grades of oil products are
the pipelines e.g. Colonial Pipeline (CPL), BPL.
Some pipeline specifications are very specific & detailed. Hence a
trader will just say CPL - D Grade. But there is a vast amount of
grading information under that broad category.
Consideration being, Product -to- What Pipeline -to- What grade e.g.
Gasoline - CPL - D (may be equivalent to Gasoline - BPL - D4)
Products fall under two broad categories. Crude &r Refined Products.
Then, there are grades of Crude e.g. WTI, BRENT, BONNY LT etc For
Refined Products, there are further categories of products again e.g.
Gasoline, Jet Fuel, Heating Oil (Gas Oil Europe), and all these have
different grades. The list is very extensive. There are different naming
conventions. But, for the more popular grades, similar names are used
e.g. Brent is Brent.
Changing landscape also affects grades. For instance due to the status
of the Brent fields, the 3 mixtures that were combined as a consequence
led to the new Grade: BFO.
Exchanges are finite, and they list a very limited set of well
defined/popular grades.
Usually, agreements have to be made between counterparties when one
expects actual delivery in one grade, but gets another. Some
compensation on the differential has to be made. Only if it is possible
to push that grade through the refinery for example.
Various regions, and various pipelines within/without the regions
usually have different nomenclatures/naming conventions for the various
products and the products' grades. Distillates vs. Heating Oil (US) vs.
Gasoil (Euro)
And, also within a region, seasonal and governmental factors have some
measure of impact e.g. specific to the US, in some zones, governments
pushing certain environmental agendas created zoning rules that dictates
what Grades can be traded, manufactured and how.
For gasoline, standard grades like regular unleaded, premium, super are
usually at the pump. However, there are seasonal sub-gradation on these
based on additives (lightening e.g. Butane) that are mixed in or taken
out due to the changing seasons. Some of these grades are A1,..., A4;
M1, ..., M4 etc
Cross regional exports sees the need to convert grades across regions
based on equivalence. E.g. East Coast, West Coast, Europe : Jet fuel -
54, 56 US, vs. Defstan Spec Europe.
Sometimes, there are company specific grades that not everyone in the
industry knows about. E.g. Rawhide. And even within the same company,
there are inherent positional problems based on differing naming
convention for the same grade of a product across any two regions at the
least.
I was also provided with this link:
http://www.oil-transport.info/Crude_oil_data/crude_oil_data.html
-----Original Message-----
From: commwg@xxxxxxxx [mailto:commwg@xxxxxxxx] On Behalf Of Owen King
Sent: Friday, May 08, 2009 12:30 PM
To: commwg@xxxxxxxx
Subject: FpML-Com 2009-05-08 Minutes
* Present
Marc Gratacos, ISDA
Raphael Iyageh, GS
Lyteck Lynhiavu, ISDA
Owen King, Markit (Chair)
Andreas Michael, Citi
Farzad Moshfeghi, Standard Bank
Peter Stockman, DTCC
William Wise, Markit
Irina Yermakova, ISDA
* Apologies
Alicia Szybillo, DTCC
* Review outstanding actions
>> ALL to find out more details on averaging-in options.
Awaiting feedback. [Carried Forward]
>> ALL To send example confirmations for power trades documented under
ISDA/EEI/GTMA.
Additional confirmations would be appreciated. [Carried Forward]
>> PS to provide feedback on the sample trades included with the schema
files.
PS has reviewed the sample trades and did not feel changes were needed.
[Closed]
>> ALL to provide sample coal confirmations.
No additional coal confirmations have been received. [Carried Forward]
>> RI to investigate the source of oil grade values used in internal
trading/risk systems.
RI explained that the oil grade data used at GS varied by region and
pipeline and will send out an email to the group detailing this further.
OK suggested that since the current ISDA oil documentation is primarily
focused on pipeline trades the group could start to compile a list of
published pipeline specifications with a view to referencing them as
external coding schemes. Further analysis would be needed to ensure
coverage of the grades needed for title transfer trades. [Closed]
* Minutes
1. Product names for physical transactions
OK asked the group for their opinions of the current use of
CommoditySwap and CommodityForward for physically-settled commodity
trades in FpML:
- CommodityForward
+ Fixed Price, Single Period (Bullion)
- CommoditySwap
+ Fixed or Floating Price, Single or Multiple Periods (Gas, Oil,
Electricity, Coal)
RI noted that GS only use "Forward" to refer to fixed price, single
period metals trades which concurs with the current approach in the
schema. "Term" is used by GS for other single period trades and "Series"
used to refer to periodic trades.
OK explained that a potential area of confusion is that while a fixed
price, single period physical bullion trade would be a CommodityForward,
a fixed price, single period gas, oil, electricity or coal trade would
be a CommoditySwap. However, moving other physical commodity leg
components to within CommodityForward would mean that all the periodic
elements within those components would cease to make sense and could
lead to misuse of the schema.
Please consider and let the group know whether you are comfortable with
the current approach.
2. Physical COAL
OK explained the revised proposal for physical coal, noting that there
were still areas that require further work.
OK asked that participants distribute the questions document (attached)
to the relevant people in their organisations in order to get specific
answers to those questions for next week's call.
WW said he would try to get some feedback on these questions.
FM suggested that rather than having both standardQuality and
rejectionLimits elements, standardQuality could be updated to include
limits/thresholds on each constituent element. OK agreed with this, but
noted that the group would need to confirm how Periodic Performance
Quality specifications are applied in practice. (If the quality and
limits are not both specified per period, it may be preferable to keep
them as separate elements)
OK also noted that allowing more than one Delivery Point may be
necessary.
* AOB
OK said that Working Draft 3 of FpML 4.6 has been published which
includes all physical commodities work to date excluding coal:
http://www.fpml.org/spec/fpml-4-6-3-wd-3/
OK asked for feedback on whether participants feel there should be the
facility within the electricity schema to refer to a pre-defined load
shape (using a coding scheme) in addition to explicitly specifying the
Settlement Periods.
* Actions
[Carried Forward] ALL to find out more details on averaging-in options.
[Carried Forward] ALL To send example confirmations for power trades
documented under ISDA/EEI/GTMA.
[Carried Forward] ALL to provide sample coal confirmations.
[New] RI to send an email to the group outlining GS's use of oil grade
values.
* Next meeting 15:00 UK / 10:00 US Fri 15th May 2009
The content of this e-mail is confidential and may be privileged. It may
be read, copied and used only by the intended recipient and may not be
disclosed, copied or distributed. If you received this email in error,
please contact the sender immediately by return e-mail or by telephoning
+44 20 7260 2000, delete it and do not disclose its contents to any
person. You should take full responsibility for checking this email for
viruses. Markit reserves the right to monitor all e-mail communications
through its network.
Markit and its affiliated companies make no warranty as to the accuracy
or completeness of any information contained in this message and hereby
exclude any liability of any kind for the information contained herein.
Any opinions expressed in this message are those of the author and do
not necessarily reflect the opinions of Markit.
For full details about Markit, its offerings and legal terms and
conditions, please see Markit's website at http://www.markit.com
<http://www.markit.com/> .
-------------------------------------------------------------------------------
To unsubscribe: Email majordomo@xxxxxxxx with a blank subject line
In the body include the line: unsubscribe commwg youremail@address
To view archives: http://www.fpml.org/_wgmail/_commwgmail/threads.html