C.O.R.M. & CORMi

Commoditised Oil Refinery Margins & the TFS Energy
CORMi Index Suite

TFS Energy has launched a Commoditised Oil Refinery Margins trading hub and a suite of refinery margin indices to represent both complex and simple refining setups in North West Europe, The Mediterranean and Singapore.
After a survey covering all types of market participants, including refiners themselves, we are confident that each index will offer a convenient representation of oil refining in each area.
Each index will be traded as a basket of OTC derivatives representing both crude grade and refinery products. Market participants will be able to trade the Commoditised Oil Refinery Margins as a single spread trade or via individual component legs. In the latter case, all legs will be aligned before a transaction is executed.
Indices representing five representative Commoditised Oil Refinery Margins will be published daily to assist with trading, risk management and benchmarking:

CORMi #1
North West Europe Standard
CORMi #2
North West Europe Complex
CORMi #3
Mediterranean Complex Vs Brent
CORMi #4
Singapore Standard
CORMi #5
Singapore Complex

In addition, we will be happy to quote bespoke refinery margin trades to individual clients and will provide data and execution services as required. This service will be known as: CORM-B.

About C.O.R.M. (Commoditised Oil Refinery Margins)

TFS Energy
Part of the global Tradition Group, TFS Energy brokers the full spectrum of energy and energy-related markets with OTC businesses operational globally in electricity, natural gas, crude oil and refined products, coal, environmental and weather derivatives. The refinery margin broking team is very experienced with decades of know-how. The team is led by a Senior Broker with over 20 years of trading experience in refining and OTC derivatives trading.

After an intensive consultation period, our CORMi Index Suite launched in April 2013.

More Risk Management Potential
Refiners have a long history of using OTC crude & products markets to hedge their refinery margins in full or in part. And proprietary traders have actively traded refinery margins and used the differentials as relatively low risk route to directional oil price trading.

But transactions have been complex to trade with several legs to execute at the same time with multiple transaction costs and variable liquidity.

TFS Energy Commoditised Oil Refinery Margin Indices (CORMi) will provide the necessary focus, trading hub and liquidity, while providing clients with the ability (but not the obligation) to “clear” one or all legs of the trade if desired.

While we appreciate that any refining margin index will not fully match an individual precise refinery specification, we are sure that after industry-wide consultation, the C.O.R.M. indices will represent a benchmark that will meet the majority client’s requirements and be a catalyst to increased liquidity and therefore better risk management practices.

This document and its contents are confidential. It is intended solely for the use of the individual or entity to which it is provided. Information contained herein is the sole property of Compagnie Financière Tradition S.A. and/or Tradition Financial Services Ltd and/or TFS Derivatives Limited (together “Tradition”). Unauthorised disclosure, copying or distribution of such information is strictly prohibited, and the information shall not be redistributed in any form to any third party, in each case without the prior consent of Tradition. Whilst every effort is made to ensure the accuracy of the information contained herein, no warranty, condition or guarantee is given by Tradition in respect of any information. Nothing herein constitutes investment advice or an offer, or solicitation of an offer, to buy or sell any futures contract, or security or option or other derivative instrument or other financial product. Trading of all such futures, securities, options and other derivative instruments entails significant risks which can result in substantial financial loss. Such risks should be fully understood prior to trading. Tradition does not offer tax or regulatory advice. To the maximum extent of the law, Tradition accepts no responsibility for any reliance placed on the contents of this document and accepts no liability for any direct, indirect or any other loss arising out of any use of the information contained in this document or any omission from it. This document is directed at Eligible Counterparties and Professional Clients as defined by the Financial Conduct Authority (FCA) and is not for distribution to, nor should it be relied upon by, Private Clients. It is not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to any applicable law or regulation.

Detail & Contact
For a copy of our C.O.R.M. brokerage rates, CORMi index specification and analysis on how your refinery business and crude/product spread trading could be enhanced by our team, please contact us.


London: +44 (0) 20 7198 1500
Singapore: +65 6226 2323