U.S. Gulf Coast (version 1.2)

U.S. Midwest (version 1.1)

OPIS NGL Spot Pricing (version 1.5)

OPIS Residual Fuel Spot Pricing (version 1.2)

OPIS Asia Distillates Spot Pricing (version 1.1)

OPIS Asia LPG Spot Pricing (version 1.2)

OPIS Europe Distillates Spot Pricing (version 3.0)

Overview

For over three decades, OPIS has been a news and pricing leader in the downstream refined products marketplace. We have served customers throughout the many industry segments — traders, suppliers, commercial end-users, wholesalers and retailers — with up-to-the minute, award-winning news, analysis and pricing that appears in our many published reports and on-line services.

In that time, OPIS has become the only provider of U.S. spot, rack and retail prices — giving us a complete picture of the marketplace that is rivaled by no other petroleum information supplier.

OPIS editors collectively have more than 250 years experience covering petroleum markets. Our editors know that our numbers are commonly referenced by the industry, but we remain at arms’ length. OPIS does not invest in oil companies, speculate on oil prices or accept special favors.

OPIS methodologies are developed after substantial consultation with the stakeholder community, are in-line with market realities and are regularly reviewed by customers and editors on a quarterly basis.

Market data is collected by editors via telephone calls, e-mails, instant messaging and electronic transfer of back office deal sheets. Market data must be provided to OPIS Editors on the day the market is assessed or it will not be considered in the daily assessment.

Editors undergo rigorous internal market training and supervision before assessing markets as do backup editors who may be called on to fill in for a particular market’s primary editor. Editors’ market calls are internally reviewed daily prior to publication by a supervisory editor who checks their accuracy and adherence to OPIS methodology.

OPIS Editors always search for the most complete picture of market activity in their assessments. However, with some products and in some markets the amount of transactional data is much less comprehensive. In such case, OPIS Editors are trained to use bid/ask ranges to set highs and lows. Highest bid and lowest offer may set the parameters of these ranges. In some cases, historically demonstrated mathematical formulae may be applied to calculate the differential value of an illiquid product relative to a more liquid product.

In some markets and with some products, one or more market sources may provide the majority of market data used by the OPIS Editor in assessing the market’s value. It is OPIS’ policy and methodology that such price discovery, while not as desirable as a variety of sources for market data, is still valid for the purposes of setting a market value in the absence of any other data.

OPIS conducts quarterly spot methodology reviews during which our market editors consult with stakeholders to ensure our methodologies reflect current market realities and are as useful and relevant as they can be.

These spot methodology reviews are in addition to our ongoing and constant examination of our methodologies that may result in improvements in our processes and practices.

Both quarterly and as-needed methodology changes involve a robust polling of the marketplace to ensure all points of view are considered prior to any changes being considered or made.

OPIS spot market editors reach out to stakeholders through a variety of communication channels including e-mail, telephone and instant messaging to garner input on any contemplated methodology changes.

During quarterly spot methodology reviews, all current methodology language is reviewed with stakeholders to ascertain if any improvements or revisions need to be made.

Based on the input received, OPIS senior editorial leadership will decide whether to accept or reject suggestions made by stakeholders for methodology changes.

Once a spot methodology change is contemplated, OPIS reaches out to stakeholders in the form of a formal letter delivered via email soliciting feedback on the change. Feedback may be given via post, email or telephone and the opportunity to comment on any contemplated spot methodology change is open for no less than four (4) weeks and generally not more than six (6) weeks.

In the case of methodology additions, a draft notice is sent out to customers with a deadline for comments set at a maximum of two (2) weeks.

OPIS will publish stakeholder comments received with our responses regarding proposed methodology changes on our website and will respect commenter confidentiality when requested.

In each of OPIS’ spot methodologies, the timeframe for accepting data submissions for inclusion into our spot market assessments is set to be as accurate and reflective of market behavior as is possible given our publication deadlines.

In some markets, the timeframe available for data submissions may be longer or shorter than in other markets in order to reflect the unique nature of the spot markets being assessed.

It is OPIS’s firm policy that all submitters of spot market data or intelligence must act in good faith with OPIS and its subscribers by disclosing only truthful and complete data relevant and pertaining to our spot market coverage. OPIS will not accept any data submissions resulting from inter-affiliate transactions. Any submitter found to be wilfully submitting incomplete or untruthful data will be excluded from submitting data to OPIS spot market assessments. In addition, OPIS may at its discretion report the suspected attempt at contributing knowingly false data to the submitter’s company and/or immediate supervisor. For questions and/or feedback please contact OPIS Director of Content Development Robert Gough at rgough@opisnet.com or 1-301-287-2496.

This document explains our methodology for price collection at all levels and the steps we take to ensure data integrity and accuracy.

OPIS Spot Price Customer Bill of Rights

Every spot price editor at Oil Price Information Service understands that his or her top priority is calling market assessments fairly. Our methodologies are crafted after careful consultation with our customers and applied by our editors to ensure maximum transparency and accuracy.

Still, we understand there may be times when spot price customers wish to question, dispute or comment on a price assessment and/or our methodologies. As a valued OPIS spot price customer, you have the right to:

• a prompt reply to any inquiry regarding price assessments and/or methodology within two trading days
• a full consideration by senior OPIS spot market personnel of any request for a correction or adjustment of a price assessment as well as any suggested changes to OPIS spot price methodology and
• complete confidentiality.

You can fill out our online form here to let us know if you have a question, complaint, compliment or comment about one of our spot assessments.

The appropriate OPIS personnel will reply to complaints with two (2) spot trading days via email. This reply may or may not be a resolution of the complaint but it will acknowledge receipt of the complaint and assure the complainant that he or she can expect an answer in a timely manner.

If after receiving OPIS’ answer to the complaint, a complainant wishes to appeal OPIS’ decision, he or she has the right to seek recourse with an independent third party arbiter appointed by OPIS.

Quality and Integrity of Spot Price Methodology

OPIS publishes its market assessment methodology in full on this website and in abbreviated form in its nightly reports. The methodology is written in clear, easy-to-understand language and is fully available to the public and does not require a user name or password for access. Details of each product assessment’s methodology are below.

Reliable, Indicative and Distortion-free

OPIS’ overarching strategic goal continues to be that it is recognized as a widely accepted fuel price benchmark for supply contracts and competitive positioning. OPIS is relied on as a trusted benchmark because, based on its published methodology and internal policies and practices, OPIS can provide assurance it remains completely unbiased and independent. OPIS has no stake in fuel transactions, is not funded by oil industry initiatives, and strictly adheres to antitrust guidelines determined by independent legal counsel.

OPIS does not discriminate between reporting parties that are in good standing and have demonstrated a commitment and reputation for truthful and accurate price discovery when calculating its market assessments.

Criteria and Procedures

OPIS market assessors follow the marketplace throughout a full day of trading by constant communication with designated and approved traders and brokers to discover done deals, bids and offers. This full day methodology requires OPIS market assessors to be in contact with active marketplace participants during every trading day.

The OPIS full day methodology is applied to all of its market assessments with the exception of Europe LPG which utilizes a “market window” to capture deal activity. This window is described fully in the Europe LPG methodology. This “market window” approach to assessing the Europe LPG is a reflection of the preference of the market participants as documented in OPIS’ electronic log of customer feedback and input and reflects the unique nature of the market’s behavior.

OPIS market assessors communicate with market participants via electronic instant messaging (e.g. Yahoo! IM), email and telephone communication.

Additionally, OPIS market assessors receive deal sheets from active market participants detailing their market activity for the day.

Only market data that fits OPIS methodology is used in assessing ranges for OPIS spot products. This includes restrictions on the timing of the market activity reports and the volume of product being traded as well as other factors as enumerated extensively by individual commodity, and made publicly available.

Preference for OPIS market assessments is done deals. However, in the absence of done deals, OPIS market assessors use confirmed bids and offers to set ranges for market assessments. Highest bid and lowest offer are used by OPIS market assessors to set ranges in the absence of done deals.

In very illiquid markets, formulations are used to calculate values of derivatives of more liquid products based on historic market behavior. These formulations are set based on market participant feedback and approval.

OPIS supervisors routinely review market assessors’ judgments throughout the trading day and prior to publication of the assessment. Additionally, OPIS supervisors review any market data not used in the assessment and the reasons they were not used.

Units of measure referenced in OPIS market assessments vary depending on the standard measurements used by the commodity marketplace being followed (e.g. refined products are assessed in US dollars per barrel while renewable biofuels such as ethanol are assessed in US dollars per gallon).

Consistency Between Assessors

Each market OPIS assesses has three fully trained market editors assigned to it. Each of these market editors is fully versed in the latest methodology, market participants and market intelligence available for that market. In the event the primary market editor is not available to assess his or her market, the secondary editor is fully capable of stepping in to assess the market. Additionally, a third level of redundancy in editorial continuity is built in. All OPIS data is thoroughly archived and backed up by information technology systems and hardware on- and off-site.

New OPIS market assessors undergo apprenticeship training in OPIS methodology and are required to observe closely as veteran market assessors assess markets for a period of no less than four (4) weeks prior to assessing those markets themselves.

Additionally, OPIS market assessors report to and are supervised by a core group of veteran OPIS senior editors who ensure OPIS methodology and defined practices and procedures for assessing markets are consistently followed.

Relative Importance of Types of Data

OPIS market editors give all due priority to concluded transactions when making market assessments with the exception of market trading days in which an exceptional event or anomaly occurs just prior to OPIS’ deadline for publishing market assessments. However, all price assessments that deviate from OPIS’ prioritization policy for transactional data require the consultation and prior approval of a supervisory editor.

In the case of illiquid markets where transaction volume is light or non-existent, editors draw upon bids and offers and other market intelligence to set ranges. In some cases, assessments are made based on historically demonstrable formulaic relationships to more liquid products that are reviewed regularly with the marketplace to maintain their relevance.

Notional or Illiquid Markets

In the absence of done deals, OPIS market assessors can set ranges for products in somewhat illiquid markets based on bids and offers heard in the marketplace. In such cases, OPIS market assessors use a highest bid/lowest offer methodology.

Some OPIS market assessments are “notional values” meaning the product markets being assessed do not typically feature daily activity such as done deals, bids or offers. Instead, these markets are understood by the marketplace, OPIS customers and OPIS market assessors as formulations referring back to a “parent”, more liquid product based on historical and logical pricing relationships affected by known transportation, storage or handling costs.

Timeliness of Data Submissions

OPIS market assessors track spot markets on a full-day basis and OPIS’ daily ranges reflect confirmed trades by timing, volume, product and location each day.

Typical trading hours extend from 9:00 a.m. to 5:15 p.m. Eastern Time (6:00 a.m. to 2:15 p.m. Pacific Time). Deals that are received outside those hours are reviewed, evaluated and independently approved for consideration in our full-day ranges. In order to meet publication deadlines, OPIS reserves the right to not accept deals as part of the final day’s product ranges if that information is sent to/received by OPIS after 5:15 p.m. (2:15 p.m. Pacific Time).

OPIS market assessors sample on a daily basis a broad cross-section of refiners, traders, marketers, brokers and end users active in buying, selling or trading physical barrels. OPIS policies and practices require market assessors to cast a wide net to capture as many transactions as possible in arriving at OPIS day-to-day price assessments of spot market values. OPIS market assessors take an arm’s length approach to covering the market.

OPIS daily spot market assessments include information obtained from back office deal logs sent to OPIS as part of its daily market price discovery. The information highlights actual transactions during the day, including price, volume, product, timing and counter party. OPIS market assessors compare the end-of-the-day deal logs with our confirmed deals through the day to ensure OPIS does not duplicate information. OPIS confirms deals via constant communication with traders and brokers in the marketplace.

Bulk of Data from One or More Sources

OPIS takes into account in its daily full-day price assessments market data from a variety of approved reporting entities. The volume of data coming from any single entity on any given day can vary, depending on that entities activity (buying or selling needs) in the marketplace.

OPIS gives equal weight to all market data submitted and deals confirmed based on our published methodology. To ensure consistency and integrity, all deals are weighed equally, without respect to any single data provider constituting a significant proportion of the total data.

OPIS requires its market assessors to conduct a broad canvass of the market each day so that OPIS is not “submitter dependent” on any one source for any single portion of data.

Market liquidity varies by individual regions from day to day with pipeline scheduling days typically reflecting high volume days.

Criteria for Excluding Data

OPIS adheres to its methodology language first and foremost. Any data that does not conform to the methodology’s definitions regarding timing, size, specification, volume or verifiability are not included in OPIS’s market assessments.

All data exclusions must be reviewed and approved by an OPIS supervisory editor.

Additionally, OPIS market assessors reserve the right to exclude market data received that either: 1) cannot be repeated in the marketplace, 2) cannot be confirmed in the marketplace by counter-parties or independent market observers and/or 3) comes from a source that is unidentifiable and/or unverifiable as a “bona fide” source of market data.

Rationale for Methodology Adoption

All OPIS market assessments follow methodologies reflective of the market’s actual behavior with regard to timing of trading, specifications of product, location of trading, and historically established relationships between products.

OPIS methodologies are carefully crafted through market participant consensus and are designed to be inclusive of all market data that fits OPIS published methodology parameters, including restrictions for inclusion of any market data that does not fit those same parameters.

The timeframes in which products are assessed are those requested by the market participants and vary from product to product.

OPIS market assessments commonly use the terms “prompt” and “any” to describe the timing of product delivery. Definition of timeframes for these terms varies from market to market and from product to product. In general, however, “prompt” refers to product expected to make delivery within a week while “any” refers to product expected to make delivery after a week’s time but before the end of a month.

Procedures for Internal Review and Approval

OPIS methodology is version controlled and constantly scrutinized for clarity, relevance and comprehensiveness by market assessors and senior editors. It is also reviewed and discussed regularly during weekly spot market editors’ meetings. Records of these meetings, subjects covered and market assessors in attendance are kept in a central electronic file.

OPIS methodology language and any proposed changes are drafted by market assessors and/or senior editors and circulated for review by all other market assessors and senior editors involved in the market(s) and product(s) addressed by the methodology. All proposed changes are version-controlled and require approval by the Director of Content Development prior to initiating external review.

Additionally, mandatory quarterly reviews of all OPIS methodology are conducted and documented by relevant OPIS market assessors and senior editors to ensure clarity, accuracy and relevance. Records of these quarterly methodology reviews, market participants polled and their feedback received are kept in a central electronic file.

Procedures for External Review and Approval

OPIS methodologies are developed after substantial consultation with the stakeholder community, are in-line with market realities and are regularly reviewed by customers and editors on a quarterly basis.

Whenever an OPIS methodology is being created or altered, stakeholders in the product market affected are consulted via a two-step process:

1. key stakeholders are asked to review an exposure draft of the proposed methodology (or change to methodology) and given adequate time (two to four weeks if the change is deemed “minor” and four to six weeks if the change is deemed “major”) to respond in writing with feedback and suggest changes, etc.
2. After key stakeholders are thus polled and changes are either accepted or rejected, the proposed methodology (or change to methodology) is circulated via email to all OPIS customers who use (or would likely use) the market assessment. Thirty days are given for feedback and any suggested changes are given full consideration by senior editors and market assessors.

Reasons for rejecting stakeholder feedback might include, but are not limited to:

1. suggested changes would tend to make market discovery less transparent
2. suggested changes would exclude full market participation by otherwise bona fide market participants under the parameters of the methodology
3. suggested changes would unfairly favour one market participant or class of trade over another
4. suggested changes would limit the utility of the market assessment
5. suggested changes would distort the true functioning of the market assessment

Additionally, OPIS reserves the right to reject any feedback it deems to be non-constructive or inherently untenable.

Changes to Methodology

OPIS conducts quarterly spot methodology reviews during which our market editors consult with stakeholders to ensure our methodologies reflect current market realities and are as useful and relevant as they can be.

These spot methodology reviews are in addition to our ongoing and constant examination of our methodologies that may result in improvements in our processes and practices.

Both quarterly and as-needed methodology changes involve a robust polling of the marketplace to ensure all points of view are considered prior to any changes being considered or made.

During quarterly spot methodology reviews, all current methodology language is reviewed with stakeholders to ascertain if any improvements or revisions need to be made.

Based on the input received, OPIS senior editorial leadership will decide whether to accept or reject suggestions made by stakeholders for methodology changes.

Once a spot methodology change is contemplated, OPIS reaches out to stakeholders in the form of a formal letter delivered via email soliciting feedback on the change. Feedback may be given via post, email or telephone and the opportunity to comment onany contemplated spot methodology change is open for no less than four (4) weeks and generally not more than six (6) weeks.

In the case of methodology additions, a draft notice is sent out to customers with a deadline for comments set at a maximum of two (2) weeks. OPIS will publish stakeholder comments received with our responses regarding proposed methodology changes on our website and will respect commenter confidentiality as requested.