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What does Slope mean for LNG contracts?
Used in oil-linked LNG contracts, the slope refers to the percentage of a crude oil indicator at which the LNG is priced. For example, older oil-linked contracts typically sold at a slope of 14.5% of the Japan Customs Crude price, and included a constant to cover the cost of shipping. Today, many oil-linked contracts are priced at a slope to Brent Crude oil. Slopes tend to have an upward ceiling of 17.2%, as explained in our oil price parity definition.
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