ICE Launches New Brent Contract To Lackluster Response
December 05 2011 - 12:00PM
Dow Jones News
The planned launch of IntercontinentalExchange Inc.'s (ICE) new
Brent futures and options contracts Monday caused little stir in
the oil market as investors remained more focused on immediate
price fluctuations, traders and analysts said.
"We added Brent NX to our system this morning, but it hasn't
traded any volume to speak of," said one broker, while a trader on
the futures market added: "I must admit, I'm surprised how little
chatter I've heard on the issue."
The new contracts, known as Brent NX, have different expiry
dates from the current Brent futures contracts and are intended to
better align the futures and physical markets ahead of January
changes to the pricing system on the physical market.
Market participants said that uptake of ICE's new contract was
likely to be slow, particularly as the first month available to
trade is December 2012.
"Usually the liquidity is more in the front than the back so
it's not going to create a lot of liquidity immediately," said
Olivier Jakob, managing director of Swiss consultancy
Petromatrix.
Next week, rival exchange, CME Group Inc., will launch its own
version of the Brent NX contract in a bid to make inroads into the
Brent market, which has traditionally been dominated by ICE.
-By Sarah Kent, Dow Jones Newswires;4420-7842-9376;
sarah.kent@dowjones.com
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