In the LOOP: ICE, CME basis-Houston WTI contracts see steady trading in opening weeks

CME Group and Intercontinental Exchange are several weeks into the debuts of their basis-Houston West Texas Intermediate futures contracts, but the latter this week becomes the first to face the test of an expiry day and contract roll to a new front-month trading cycle. The December 2018 contract for ICE Permian WTI Futures expires Monday, and the front-month will become January on Tuesday, which is in line with the typical US Gulf Coast pipeline trading schedule. The contract itself launched October 22. CME launched November 5 its WTI Houston Crude Oil Futures contract, with January as the front-month. For now, there has been a disconnect between front-month CME WTI Houston (January) and front-month CME WTI Crude Oil Futures, which is WTI at Cushing, Oklahoma, (December); however, from Tuesday, both will be aligned. Both companies see an opportunity to capture a new Gulf Coast light crude benchmark amid the shifting landscape borne out of ever-increasing US crude production and exports. S&P Global Platts competes with both companies in providing pricing benchmarks to commodities markets. In the week ended November 16, ICE Permian WTI Futures had average daily volume of 305 lots. Open interest totaled 1,037 out to March 2019 at the… continue reading

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Source: CTRM Center

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