CME Group to Launch West Texas Intermediate Futures Contract
September 24 2018 - 9:27AM
Dow Jones News
By Alistair MacDonald
CME Group said Monday that it is launching a West Texas
Intermediate futures contract with physical delivery to Houston,
underscoring the rising importance of the city to energy
markets.
The global exchanges group said it will offer a new WTI Houston
Crude Oil futures contract with three physical delivery locations
on the U.S. Gulf coast, pending regulatory review.
Intercontinental Exchange Inc. said in July that it is planning
a new crude futures contract with physical delivery in Houston. The
exchange is aiming to launch this quarter, subject to regulatory
review.
Such contracts will provide traders with direct access to
Houston prices.
For decades, the benchmark for U.S. oil prices has been in
Cushing, Oklahoma, because of its accessibility through major
pipelines and extensive storage space. However, with the U.S. on
track to become a major energy exporter, some analysts say that
pricing power is shifting to the Gulf Coast, where oil gets loaded
onto tankers and shipped overseas.
Producers are already starting to look at the price of West
Texas Intermediate crude in Houston when they plan their
budgets.
"Houston's importance as a trading and export hub for physical
crude oil from Cushing and the Permian Basin continues to evolve
due to the shale oil revolution and repeal of the crude oil export
ban," said Peter Keavey, CME Group Global Head of Energy, in a
press release.
Write to Alistair MacDonald at Alistair.MacDonald@wsj.com
(END) Dow Jones Newswires
September 24, 2018 09:12 ET (13:12 GMT)
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