UPDATE:CME To Launch Argus Sour Crude Index Financial Futures

CME Group Inc. (CME) announced Tuesday it would launch financial futures contracts tied to the Argus Sour Crude Index on Jan. 25, for trading on its New York Mercantile Exchange and Globex platforms.

The new contracts follow the introduction of new sour crude oil futures markets at CME and rival IntercontinentalExchange Inc. (ICE) based on the ASCI, a relatively new benchmark for lower-quality crude oil produced in the Gulf of Mexico.

The index, owned by London-based Argus Media Ltd., drew attention in October after Saudi Arabia adopted it for pricing oil sold in the U.S., a move away from the more widely used West Texas Intermediate oil benchmark. Kuwaiti oil officials followed with plans of their own to price oil off the ASCI.

Those moves prompted speculation that a new global crude-oil benchmark was in the offing, but since launching in December, CME's physically delivered sour crude oil market has been fairly quiet.

A total of about 500 to 600 sour crude oil contracts have changed hands at Nymex since the products debuted, compared to the roughly 400,000 contracts that trade each day in the Nymex's flagship WTI crude-oil markets.

Atlanta-based ICE's sour-crude contracts have seen little to no trading since their early-December launch.

The CME ASCI financial futures will be tied directly to expectations for movements in the index. The products have been available on CME's ClearPort platform for clearing over-the-counter transactions since November, but have seen no activity there, according to a Nymex spokeswoman.

-By Jacob Bunge, Dow Jones Newswires; 312 750 4117; jacob.bunge@dowjones.com

(Brian Baskin in New York contributed to this article.)

CME (NASDAQ:CME)
Historical Stock Chart
From Sep 2024 to Oct 2024