Magellan Midstream Partners, Enterprise Products Partners and Intercontinental Exchange (ICE) said June 21 they are establishing a new futures contract for delivery of crude oil to Houston. The Midland WTI American Gulf Coast contract will be launched in early 2022, subject to regulatory approval, “in response to market interest for a Houston-based index with greater scale, flow assurance and price transparency.” Quality specifications of the new futures contract will be consistent with WTI crude oil from Permian Basin with common delivery options to Magellan East Houston terminal or Enterprise Crude Houston terminal.
Brent Secrest, executive vice president and CCO of Enterprise, said, “We are excited about this new crude oil futures contract that features the combined strength of two extensive and complementary networks of midstream assets with a world-class trading platform to provide customers with greater supply reliability, flexibility and price transparency. As the market hub for Permian Basin production, Houston represents the most logical choice for a new futures contract.”
The announcement said ICE will offer the industry a futures contract with more than 4 million barrels per day of supply capacity from Midland to Houston, access to domestic and global demand, and nearly 60 million barrels of storage capacity in Magellan and Enterprise systems.