Energy and commodity price reporting agency Argus is launching a new ethanol price assessment. The new price is expressed as a differential to gasoline in U.S. dollars per ton and is published in the daily Argus Biofuels report. The new assessment is in addition to the existing ethanol price assessment in euros per cubic meter.

The new assessment is for T2 ethanol at Rotterdam and will help market participants to assess the price of ethanol relative to the price of gasoline. This will enable market participants to use the gasoline swaps market to manage part of their ethanol price risk.

The gasoline swaps market, unlike the ethanol swaps market, has a high level of liquidity and is a commonly used price risk management vehicle. Gasoline swaps are priced against the Argus Euro-bob Oxy gasoline fob Amsterdam-Rotterdam--Antwerp (ARA) assessment and can be cleared through the CME. The Ice OTC exchange also lists Argus gasoline Euro-bob Oxy fob barge cleared swaps.

"We have introduced this new price following industry requests," Argus chairman and CEO Adrian Binks said. "The oil market is going through a particularly sensitive time and with so much uncertainty surrounding price direction it is understandable that ethanol producers and oil companies want an effective means of hedging their price risk. Argus is pleased that we have been able to quickly respond to these industry requests and provide a vehicle that could give greater stability to price planning."

The Argus Euro-bob Oxy fob ARA gasoline price — the underlying price basis in European gasoline swaps — is published in the daily Argus European Products report.