In the LOOP: Exchanges CME, ICE face off for USGC light sweet crude benchmark

The battle to secure the benchmark for US light sweet crude on the US Gulf Coast crude heated up Monday as commodities exchange CME Group launched its physically delivered NYMEX WTI Houston Crude Oil futures and options contracts, just two weeks after chief competitor Intercontinental Exchange debuted its own USGC WTI marker. CME HCL reflects “export-grade WTI” on an FOB basis at three Enterprise Products terminals in the Greater Houston refining area, according to CME. That contract will compete with ICE Permian WTI Futures, which commenced trading October 22 and represents the value of physical crude oil delivered to the Magellan East Houston terminal. S&P Global Platts competes with both companies in providing pricing benchmarks to commodities markets. “It’s become clear the status of the US light sweet crude market has moved from Cushing and the Midwest to the US Gulf Coast export market,” said Sandy Fielden, director of oil research with Morningstar. “It’s clear every new barrel of shale that gets produced now is destined for export. All the new pipelines built out of the Permian are headed to the docks, not the refineries.” “All other things being equal, the price of light sweet crude is determined in Houston,… continue reading

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Source: CTRM Center

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