| Name & Trade Code | Singapore Gasoil and Low Sulphur Gasoil 1st Line | |
| Contract Name: | Gasoil EW Box (Distillates), Time Spread & Product Differential, Asia/Europe -Commodity CFD | |
| Platform Code: | Gasoil EW Box | |
| Deal Classification: | Commodity CFD | |
| Deal Type (Outright/Product Differential/Time Spread): | Time Spread & Product Differential | |
| Geographical Region: | Asia/Europe | |
| Specification | ||
| Category: | ||
| Sector: | Energy | |
| Price Digits: | 2 | |
| Product Group: | Distillates | |
| Tenor Period: | Consecutive individual whole calendar months, e.g. February 25 (Feb25) | |
| Maximum Forward Tenor: | 12 consecutive forward Tenor Periods available | |
| Trading Screen Name: | Gasoil EW Box | |
| Deal Type: | Time Spread & Product Differential | |
| Contract Size: | 100 | |
| Unit of Trading: | mt | |
| Currency: | USD | |
| Minimal Volume[Lots] (Lots * Contract Size = Total Deal Volume ): | 1 | |
| Maximal Volume [Lots] (Lots * Contract Size = Total Deal Volume ): | ||
| Volume Step: | 0.1 | |
| Settlement: | Arithmetic mean of settlement prices throughout expiry month, please refer to Expiry Trading Overview below | |
| Trading Price Quote: | $/mt | |
| Underlying Settlement Price Reporting Agency (PRA): | Platts, ICE Exchange | |
| Expiry Trading Overview: | ||
| Contract Expiry Date: | The last working day of the month prior to the nearest expiring Tenor Period | |
| Last Trading Day (for new open positions): | ||
| Last Trading Day for closing position in that Tenor Period: | The Contract Expiry Date for the Tenor Period | |
| Tenor Period Settlement Valuation Process: | ||
| Open Volume | The net open volume for the Tenor Period | |
| Daily Settlement Value | Market-on-Close – The daily Underlying PRA assessment (Platts, Argus or Exchange) settlement assessment time, e.g. Singapore window for Singapore contracts or local PRA settlement time | |
| Daily Settlement Volume | All Open Volume will be closed and settled at Daily Settlement Value, with an MOC haircut applied | |
| Final Settlement Price | Arithmetic mean of settlement prices throughout expiry month | |
| MOC Haircut | +/- 50% of nominal OMGO spread |
The Gasoil EW Box contract is a sophisticated commodity CFD (Contract for Difference) in the Distillates group that combines both a time spread and a product differential between Singapore Gasoil and Low Sulphur Gasoil 1st Line.
Contract Purpose
This complex contract allows market participants to:
- Hedge exposure to both the time spread of Singapore Gasoil and its differential to Low Sulphur Gasoil 1st Line
- Speculate on regional price differentials between Asian and European gasoil markets over time
- Manage risk related to arbitrage opportunities between Singapore and Northwest European gasoil markets across different months
Market Significance
- Global Benchmark Relationship: Reflects the evolving relationship between key gasoil benchmarks in Asia and Europe over time
- Arbitrage Opportunities: Captures potential price discrepancies between two major gasoil trading hubs across different months
- Global Trade Flows: Provides insights into the dynamics of gasoil trade between Asia and Europe and how they change over time
Trading Benefits
- Comprehensive Risk Management: Allows hedging against both time-related and product-related price risks across regions
- Market Access: Provides exposure to both Asian and European gasoil markets over multiple months
- Complex Strategies: Enables traders to implement sophisticated spread trading and arbitrage strategies that account for both regional differentials and time spreads in a single instrument
This contract is particularly valuable for refineries, trading houses, and financial institutions active in both the Asian and European gasoil markets. It offers a powerful tool for managing complex price risks and implementing advanced trading strategies that account for the relationship between gasoil prices in different regions over time.
