In the international market, all the prices of physical transactions for Marine fuel are quoted in US$. Players are used to transact based on a price composed of an index and a premium or discount. Although, in some cases, a price in fixed amount of US$ will be adopted, that price is also determined with reference to the then prevailing index.
In terms of pricing model of transactions, MOPS is a widely adopted price index benchmark in Asia Pacific. It is the average of a set of Singapore-based oil product price assessments published by S&P Global Platts day-to-day, which is also highly associated with the general crude oil price. In particular, the price of VLSFO, is determined with reference to MOPS10ppm in the Platts Platform, or less commonly basis 0.5% VLSFO MOPS. In respect of HSFO, MOPS of FO380 CST is normally applied.
The premium or discount to MOPS will change from time to time mainly dependent on market anticipation of the changes in demand and supply, and of course the physical position of the suppliers.