ICE Announces Second Expiry in ICE Midland WTI American Gulf Coast Futures

Source: 3/24/2022, Location: North America

Intercontinental Exchange, Inc., a leading global provider of data, technology, and market infrastructure, announced that ICE Midland WTI American Gulf Coast futures (contract code: HOU) went to its second expiry on March 23, with 2,588 contracts going to delivery in April, almost double the 1,400 contracts which went to expiry in March. Each futures contract is equivalent to 1,000 barrels of Permian Basin originated WTI crude oil.

Since the contract began trading on January 24, over 31,000 ICE Midland WTI AGC futures have traded, including a record volume day on March 10 of 3,065 contracts. Open interest has grown to 4,508 contracts and goes out to January 2023.

“It’s really encouraging to see how market activity is developing around HOU and how this has continued to gather momentum despite the volatility in energy markets,” said Jeff Barbuto, Global Head of Oil Markets at ICE. “Physical market participants are seeing the value in having access to exchange guaranteed Midland WTI quality crude on the U.S. Gulf Coast, and they are increasingly using HOU to source those barrels.”

This month, ICE extended the time that participants can conduct Exchange for Physical (EFP) transactions so that they can now be executed up until the day after expiry of the futures contract. The EFP mechanism allows participants to exchange a HOU futures position for the equivalent number of underlying physical Midland WTI barrels.

The HOU contract is deliverable at both Magellan Midstream Partners’ Magellan East Houston (MEH) terminal and Enterprise Products Partners L.P.’s Enterprise Crude Houston (ECHO) terminal. To further facilitate trading between the MEH and ECHO terminals to create one large liquidity pool, Magellan and Enterprise will transfer Midland WTI barrels between the terminals for no charge during the first year if the barrels are not delivered to the buyer’s preferred terminal, and at 10 cents per barrel for all other WTI transfers meeting HOU quality specifications.

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