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Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology, and market infrastructure, today announced that ICE Midland WTI American Gulf Coast futures (Midland WTI AGC) began trading on January 24, with the equivalent of over 2.8 million barrels traded within the first three days.
The contract, which trades under the code HOU, is deliverable at both Magellan Midstream Partners’ Magellan East Houston (MEH) terminal and Enterprise Products Partners L.P.’s Enterprise Crude Houston (ECHO) terminal, which are collectively supplied by over four million barrels per day of crude pipeline capacity.
By the close of its third day of trading, a total of 2,874 ICE Midland WTI AGC futures had traded. Each futures contract is equivalent to 1000 barrels of Permian Basin originated WTI crude oil.
“The early trading activity in HOU, with the expanded infrastructure of Magellan and Enterprise behind it, marks a significant step in the development of the U.S. Gulf Coast as a global benchmark pricing location for U.S. crude,” said Jeff Barbuto, Global Head of Oil Markets at ICE. “As the market develops, participants will find more ways to utilize HOU for acquiring, trading and managing risk around Midland WTI as it becomes an increasingly important grade of crude globally.”
As recently announced, to further facilitate trading between the MEH and ECHO terminals to create one large liquidity pool, Magellan and Enterprise have agreed to 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.
The Midland WTI AGC futures contract has export access to over 14 ship docks in the Houston area. Together Magellan and Enterprise’s Houston distribution systems offer 60 million barrels of combined crude storage capacity. These distribution systems connect to a further 90 million barrels of storage capacity, bringing the total to around 150 million barrels of total crude storage capacity in the Houston area, as well as offering additional direct access to water for exports and floating storage.
