UPDATE: CME Launches New 25-Day Brent Crude Contract

CME Group Inc. (CME) Monday announced plans to launch 25-day Brent futures and options contracts, following a similar move by IntercontinentalExchange Inc. (ICE) in early November.

The new contracts will start trading on Dec. 12, with Feb 2012 as the first contract month.

"Our new NYMEX Brent 25-Day contracts will offer customers a critical hedging solution to manage their price risk, at a time when the Brent market is undergoing a significant transformation," said Gary Morsches, Managing Director of Energy Products at CME Group in a statement.

The move follows planned revisions to the assessment of crude prices on the physical market by energy price service Platts.

The majority of the world's oil is priced off Platts' assessment of the physical Brent benchmark, or Dated Brent, which also underpins the futures market.

However, the company's move to expand the number of days' worth of trades it considers when calculating prices sparked concern within the industry that the futures and physical markets could become disconnected, making it difficult for traders to adequately hedge their positions.

Platts is owned by McGraw-Hill Cos. (MHP).

By Sarah Kent, Dow Jones Newswires;4420-7842-9376; sarah.kent@dowjones.com

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