MYworldfix

Intercontinental Exchange, Inc. (NYSE:ICE) has made significant strides in the crude oil market. On November 20, 2024, its ICE Midland WTI (ICE:HOU) crude futures achieved a remarkable record open interest of 160,600 contracts, surging over 130% year-over-year. This growth showcases the increasing importance and acceptance of HOU as a benchmark price for Midland-origin and Midland-quality crude.

Unlock the Potential of ICE Midland WTI Crude Futures

Record Open Interest and Market Impact

Since its launch, HOU has emerged as a widely recognized benchmark. In November, a record 20 million barrels of Midland WTI crude were delivered through the exchange settlement for HOU and via EFPs. EFPs offer customers the flexibility to deliver barrels to various locations and choose flexible delivery dates. This flexibility has contributed to the growing popularity of HOU.Continental Resources' decision to switch a portion of its Permian production to price off of HOU is a significant endorsement. By replacing the differential to WTI Cushing, HOU has firmly established itself within Midland WTI pricing. Platts, part of S&P Global Commodity Insights, has proposed to launch a daily price assessment of Midland WTI crude as a differential to HOU, effective January 22, 2025. This further validates HOU's position.

ICE HOU Pricing and Market Connectivity

ICE HOU pricing reflects the current fundamentals in Houston, delivering physical crude into two major crude oil systems on the U.S. Gulf Coast - the ONEOK Magellan East Houston (MEH) and Enterprise Crude Houston (ECHO) terminals. These terminals are connected to Platts-approved water terminals, facilitating the delivery of Midland WTI into Brent. HOU is the only exchange-guaranteed source of ratably deliverable Midland WTI, with its quality spec matching the Platts spec for Midland WTI.ICE offers various spreads to help customers manage price risk. HOU time spreads and inter-commodity spreads with Brent and WTI Cushing (Domestic Light Sweet) provide valuable tools. Customers can also benefit from high margin offsets of up to 98% when clearing HOU alongside other oil positions cleared at ICE. These offsets are available across a wide range of over 800 oil contracts.

Global Oil Complex and Open Interest Growth

Across ICE's global oil complex, open interest stands at 14.3 million contracts, showing an approximately 20% year-over-year increase. Alongside the record highs in HOU, ICE's broader oil futures markets reached a record open interest of 9.5 million contracts on November 28, 2024. Oil is just one part of ICE's extensive global commodity markets, where open interest stands at 63.8 million contracts, up over 10% year-over-year. This growth highlights ICE's dominant position in the commodity market.Jeff Barbuto, Global Head of Oil Markets at ICE, emphasizes the significance of these milestones. He expresses gratitude to partners and customers for their work and support in developing this physically deliverable benchmark for crude oil in the U.S. Gulf Coast.