Domestic Trading Centers
believe that crude oil designated as Domestic Sweet needs a few
basic parameters in addition to gravity and sulfur in order for crude to
fall within this designation. These
additional parameters are necessary to better define Domestic Sweet,
while at the same time reducing its variability.
This will allow refiners to better determine the actual value of Domestic
Sweet to them as they can with other, well defined crude types.
Recommended Additional Specifications for Domestic Sweet Crude Oil at Cushing, OK
On August 10, 2010, the following letter was sent to Cushing operators, shippers, and other interested parties with the COQA recommendations for additional specifications for Domestic Sweet Crude Oil at Cushing, OK
RE: Recommended Additional Specifications for Domestic Sweet at Cushing, OK
The Crude Oil Quality Association (COQA) is a petroleum industry technical organization comprised of members representing refiners, pipeline companies, terminal operators, chemical and service companies, and commercial laboratories. The association is dedicated to the belief that maintaining the quality and integrity of the refining characteristics of crude oil streams is of importance to all parties from production to the refinery. As such, we have been addressing crude oil specifications for more than a decade. The Refiners Crude Oil Quality Group, predecessor of the COQA, was responsible for the successful adoption of the LLS specifications over 10 years ago.
Consistent with our mission and in studies spanning more than five years, COQA has identified key parameters that more comprehensively describe Domestic Sweet crude oil delivered at Cushing, OK (NYMEX: Light Sweet Crude Oil Futures), has defined the analytical test procedures to be used in measuring these parameters, has reviewed historical and current quality data for these, and recently reached consensus on the additional specifications shown in the following table.
These additional specifications will provide greater confidence in the quality of Domestic Sweet for all who physically process this grade, as well as those who transact futures and delivery contracts. With this more comprehensive definition of the quality of Domestic Sweet, there will be a higher level of reliability and fungibility of this very important benchmark crude oil.
As part of the detailed statistical review of the data supporting these recommended additional specifications, the COQA, to the best of its knowledge and consistent with its Antitrust Guidelines, anticipates that adoption of these additional specifications will not restrict trade nor be a barrier to free and open competition in the markets.
The COQA recommends the immediate adoption of these specifications as part of the NYMEX Light Sweet Crude Oil Futures Grade and Quality Specifications (Section 200.12) (A), and in the operating procedures of the pipeline and terminal facilities at Cushing. The existing quality specifications for sulfur, gravity, viscosity, Reid vapor pressure (RVP), basic sediment and water (BS&W, S&W), and pour point as detailed in section 200.12 (A) (2-7) of the NYMEX Rulebook are to be retained.
With our broad industry representation, experience, and expertise, the COQA is able and willing to provide support to you in the adoption of these recommended expanded specifications. The COQA remains committed to positive actions that promote and maintain the integrity of crude oil streams.
I thank you for your consideration of these recommendations, and look forward to your response regarding when and how you plan to adopt and implement them.
Harry N. Giles
Recommended Additional Specification for Domestic Sweet Crude Oil at Cushing, OK
Click on the date below to view committee notes.
reports of the Subcommittee subsequent to May 25, 2006, go to Meeting
February 23, 2006 meeting notes
September 29, 2005 meeting notes
May 26, 2005 meeting notes