ICE Midland WTI American Gulf Coast futures set trading volume record
Intercontinental Exchange, Inc. (NYSE:ICE) today announced that ICE Midland WTI American Gulf Coast futures had a single day volume record on June 14 with 4,136 contracts traded.
“We’re pleased to see the increase in volume and participation in the HOU contract,” said Jeff Barbuto, Global Head of Oil Markets at ICE. “For U.S. crude exports to Europe or Asia, Midland WTI priced at Houston versus Brent or Murban provides a very clean and efficient way to manage actual price risk. In addition, producers, refiners, and traders can benefit from substantial margin offsets of up to 95% by hedging, trading, and clearing both Midland WTI and Brent or Murban on ICE. With the recent announcement by Platts that Midland WTI will be deliverable into the Brent complex, we remain optimistic that volume and open interest will continue to move higher.”
Since the contract began trading on January 24, roughly 85,000 ICE Midland WTI AGC futures have traded. Open interest is at 4,248 contracts and goes out to January 2023.
The HOU contract is deliverable at both the Magellan East Houston (MEH) terminal and Enterprise Crude Houston (ECHO) terminal. There have been four expiries since the contract began trading, delivering a total of 9.5 million barrels of Permian Basin originated WTI crude oil.
This month, Magellan, Enterprise and ICE announced that the “no-charge” arrangement between the MEH and the ECHO terminals to transfer crude oil delivered through the futures contract has been expanded to include deliveries conducted via ICE’s Exchange for Physical and Alternative Delivery Procedure mechanisms. The EFP mechanism allows participants to exchange HOU futures positions for the equivalent quantity of underlying physical Midland WTI barrels in the same delivery month, while the ADP mechanism allows a buyer and seller to vary the terms of the delivery including, but not limited to, the location.