May 11, 2018 / 4:22 AM / a year ago

Glencore temporarily barred from Platts' Singapore fuel oil pricing process -sources

SINGAPORE, May 11 (Reuters) - Glencore was temporarily barred from the S&P Global Platts price assessment process for fuel oil cargoes starting at the end of April, according to five sources with knowledge of the matter.

However, by Thursday, the company had returned to the so-called market-on-close (MOC) price assessment process for the Singapore fuel oil market, known by traders as the “window”, according to trade data collected by Reuters. The window activity is a primary contributor to setting prices for fuel oil in the region.

Glencore in late April was placed under what Platts calls “editorial review” but is known to market participants as “being boxed” and means a company is not allowed to participate in the MOC. In the MOC, traders place bids, offers and trades that are monitored by Platts in order to calculate a daily price assessment.

Three of the sources said Glencore’s exclusion from the window was likely caused by the delayed delivery of an unknown number of fuel oil cargoes it sold during the MOC for April delivery.

One of those three sources and another one of the five sources also said that Glencore sold cargoes that did not meet quality specifications outlined by Platts and that also contributed to the company being barred.

Glencore spokesman Charles Watenphul responded “No comment.” to an email request from Reuters for a statement on the matter.

S&P Global Platts said in a statement it “does not comment on any participation reviews that may or may not occur, nor the activities of any individual company that participate in our assessment processes.”

Glencore is one of the world’s largest energy and commodity traders and being barred from the MOC would have left it unable to give inputs on setting the price for fuel oil in the region.

Glencore, typically an active participant in the Singapore fuel oil price assessment process, had last appeared during the MOC on April 23 when it offered to sell multiple 380-centistoke fuel oil cargoes, trade data collected by Reuters showed.

In April, Glencore was the largest supplier of fuel oil cargoes in the Singapore fuel oil MOC process by volume having sold 340,000 tonnes of the fuel to multiple buyers. A typical cargo sold through the MOC is 20,000 tonnes.

While such exclusions not uncommon and tend to be brief, the sources said delivery disruptions could have ripple effects for the buyers or end-consumers of those cargoes including increased logistical costs and risks of non-performance for cargoes that have been sold on to third parties. (Reporting by Roslan Khasawneh; Editing by Christian Schmollinger)

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