Evolves Eurobob benchmarks in response to environmental mandates after extensive consultation
LONDON, May 3, 2023 - Environmental mandates are driving a shift in gasoline consumption across Europe towards a grade with a 10% maximum bioethanol content (E10), up from the 5% maximum previously used (E5). Across Europe, including the UK, 21 countries have already either switched to the new grade or are in the process of phasing it in, and E10 is increasingly the most widely consumed grade of gasoline in northwest Europe. Global energy and commodity price reporting agency Argus, whose Eurobob oxy barge gasoline price is used as the key benchmark to price physical and derivative contracts across Europe, has announced changes that will reflect the new market dynamics.
E5 and E10 are the "finished" gasolines sold at the pump in Europe, with bioethanol added. In the European barge market, however, unfinished grades – before the addition of the biofuel component – are typically the most actively traded on the spot market. "Eurobob oxy" is the gasoline blendstock to which 5% ethanol is added to make the finished E5 grade. "Eurobob non-oxy" is the blendstock to which 10% ethanol is added to make the finished E10 grade.
As consumers buy more E10, the market is moving towards non-oxy as the standard. For the past year, volumes of spot market trade on Eurobob non-oxy (E10) barges have exceeded that of Eurobob oxy (E5) in many months.
From 1 January 2024, Argus will calculate its Argus Eurobob oxy (E5) price as a premium/discount to the non-oxy price (E10). The Eurobob non-oxy (E10) barge price will continue to be assessed using a volume weighted average of transactions agreed during the trading day.
Argus will also use the Eurobob non-oxy (E10) financial derivative as the basis of its Eurobob non-oxy (E10) and the Eurobob oxy (E5) prices. Financial derivatives for both grades referencing Argus prices are listed on futures exchanges.
Argus Media chairman and chief executive Adrian Binks said: "Argus is committed to ensuring our benchmark prices reflect prevailing market behaviour. The European gasoline market is embracing the E10 grade, and our extensive consultation with market participants showed an overwhelming majority agree our Eurobob gasoline benchmark methodology should evolve."
Argus contact information
London: Seana Lanigan
+44 20 7780 4200
Email Seana
Houston: Matt Oatway
+1 713 968 0000
Email Matt
Singapore: Tomoko Hashimoto
+65 6496 9960
Email Tomoko
About Argus Media
Argus is an independent media organisation with 1,300 staff. It is headquartered in London and has 29 offices in the world's principal commodity trading and production centres. Argus produces price assessments and analysis of international energy and other commodity markets and offers bespoke consulting services and industry-leading conferences.
Companies in 160 countries around the world use Argus data to index physical trade and as benchmarks in financial derivative markets as well as for analysis and planning purposes.
Argus was founded in 1970 and is a privately held UK-registered company. It is owned by employee shareholders, global growth equity firm General Atlantic and Hg, the specialist software and technology services investor.
Trademark notices
ARGUS, the ARGUS logo, ARGUS MEDIA, ARGUS DIRECT, ARGUS OPEN MARKETS, AOM, FMB, DEWITT, JIM JORDAN & ASSOCIATES, JJ&A, FUNDALYTICS, METAL-PAGES, METALPRICES.COM, INTEGER, Argus publication titles and Argus index names are trademarks of Argus Media Limited.
SOURCE Argus Media
