CME Announces Clearing Of 4 More Argus-Linked Oil Contracts
By Brian Baskin, Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- CME Group Inc. (CME) will begin trading and clearing of
four futures contracts tied to the Argus Sour Crude Index later this month, the
exchange operator said Thursday.
CME and rival IntercontinentalExchange Inc. (ICE) have rapidly unrolled
derivatives linked to the index after its creator, London-based Argus Media,
said in October that Saudi Arabia would begin using the benchmark to price oil
sold in the U.S.
Saudi Arabia's move, which goes into effect in January, is likely to create a
large pool of demand for futures contracts that would allow customers to reduce
exposure to fluctuating physical oil prices. Saudi Arabia had previously used a
West Texas Intermediate price assessment tied to light, sweet crude futures
offered on the New York Mercantile Exchange, which is owned by CME.
CME plans to offer five new swap future contracts, which allow for trades
conducted over-the-counter to be cleared, or partially guaranteed, through the
exchange. Several of the new contracts will facilitate trading of the difference
in price between the Argus index and WTI, a market that will play a major role
in determining which exchange operator wins the bulk of new trading volume.
Each will begin trading and clearing on Nov. 22. A sour crude futures contract
that closely mirrors the Argus index will be offered by CME before the end of
January.
The new contracts are as follows: ASCI vs. WTI diff spread trade month, ASCI
calendar month, ASCI vs. WTI diff spread calendar month, and Argus WTI formula
calendar month. CME had earlier announced an ASCI trade month swap futures
contract.
ICE has said it will begin clearing two Argus-linked OTC contracts on Friday,
and announced that two futures contracts would launch on ICE Futures Europe on
Dec. 7.
-By Brian Baskin, Dow Jones Newswires; 212-416-2453; brian.baskin@dowjones.com
(END) Dow Jones Newswires
11-12-091628ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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