Intercontinental Exchange Announces Third Quarter Launch of Futures Contract Based on Permian WTI Crude Oil Deliverable in Houston
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global
exchanges and clearing houses and provider of data and listings
services, announced plans to launch a physically delivered Permian
West Texas Intermediate (WTI) crude oil futures contract,
deliverable in Houston, Texas. The Houston delivery point has become the
pricing center for U.S. crude oil production and exports, and the new
flat price futures contract is designed to serve hedging and trading
opportunities in this growing market. The contract is expected to launch
on ICE Futures U.S. in the third quarter, subject to regulatory review.
With the growth in shale oil production in the Permian basin in West
Texas, which is now estimated at 2.8 million barrels a day, and
increased U.S. exports alongside growing Asian demand for light sweet
crude oil, Houston has become the central delivery point for U.S. crude.
The ICE Permian WTI futures contract is designed to provide price
discovery, settlement and delivery at Magellan Midstream Partners,
L.P.’s (NYSE: MMP) terminal in East Houston.
“The U.S. Gulf Coast, with Houston as its trading hub, is the natural
delivery point for a North American crude oil benchmark based on WTI
from the Permian Basin,” said Jeff Barbuto, Vice President of Oil
Markets at ICE. “We’re excited to work with Magellan to offer a new tool
for price discovery and risk management for U.S. crude production and
exports. The recent price divergence between Cushing-based WTI and Brent
is a reminder that although Cushing is a marker for local crude
fundamentals in the midcontinent, it diverges for pricing waterborne
U.S. crude. We are working with the market to provide a reliable and
predictable quality specification and location that is relevant to
global crude pricing, and accessible for domestic and foreign buyers
alike.”
“We are pleased that ICE has selected Magellan’s East Houston facility
as the delivery point for the Permian WTI futures contract, creating
liquidity in the Gulf Coast crude oil market and increasing demand for
the region’s pipeline and storage services,” said Robb Barnes,
Magellan’s Senior Vice President of Commercial, Crude Oil.
ICE is home to the world’s leading global
crude and refined oil markets. Half of the world’s oil and refined
futures are traded on ICE’s markets, including futures and options on
the global benchmark ICE
Brent, the U.S. benchmark West
Texas Intermediate (WTI) crude, the Asian benchmark Platts
Dubai crude, Gasoil,
Heating Oil and RBOB Gasoline, as well as more than 500 additional
grades and oil products.
About Intercontinental Exchange
Intercontinental
Exchange (NYSE: ICE) is a Fortune 500 and Fortune Future 50 company
formed in the year 2000 to modernize markets. ICE serves customers by
operating the exchanges, clearing
houses and information services they rely upon to invest, trade and
manage risk across global financial and commodity markets. A leader in
market data, ICE Data
Services serves the information and connectivity needs across
virtually all asset classes. As the parent company of the New
York Stock Exchange, the company raises more capital than any other
exchange in the world, driving economic growth and transforming markets.
Trademarks of ICE and/or its affiliates include Intercontinental
Exchange, ICE, ICE block design, NYSE and New York Stock Exchange.
Information regarding additional trademarks and intellectual property
rights of Intercontinental Exchange, Inc. and/or its affiliates is
located at http://www.intercontinentalexchange.com/terms-of-use.
Key Information Documents for certain products covered by the EU
Packaged Retail and Insurance-based Investment Products Regulation can
be accessed on the relevant exchange website under the heading “Key
information Documents (KIDS)”.
Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1995 -- Statements in this press release regarding ICE's business
that are not historical facts are "forward-looking statements" that
involve risks and uncertainties. For a discussion of additional risks
and uncertainties, which could cause actual results to differ from those
contained in the forward-looking statements, see ICE's Securities and
Exchange Commission (SEC) filings, including, but not limited to, the
risk factors in ICE's Annual Report on Form 10-K for the year ended
December 31, 2017, as filed with the SEC on February 7, 2018.
SOURCE: Intercontinental Exchange
ICE-CORP
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