The Intercontinental Exchange (Ice) no longer expects to launch Abu Dhabi's Murban crude futures contract in the first half of this year because of "the ongoing situation with Covid-19".
"We continue to make progress including obtaining relevant regulatory approvals and working with our members and trading participants to prepare for launch. We will communicate further on launch timing as we continue through the process," Ice said.
The decision to delay comes at a time of huge volatility in the Ice Brent and Nymex WTI futures contracts, with the latter taking an historic plunge into negative territory on 20 April.
Abu Dhabi's state-owned Adnoc selected Ice to host its Murban futures contract in November. Ice has since established the new Ice Futures Abu Dhabi (IFAD) exchange for that purpose. As part of Abu Dhabi's efforts to secure liquidity in the nascent exchange once it starts trading, nine companies have signed onto IFAD as shareholders — BP, GS Caltex, Inpex, JXTG, PetroChina, PTT, Shell, Total and Vitol.
The contract will be physically delivered at Fujairah on a fob basis. But market participants who prefer a financial settlement will also have that option.
The Murban futures contract will probably trade cargoes loading two months ahead, in line with standard practice for the bulk of Mideast Gulf spot crude cargoes that trade on the Asia-Pacific market. The contract will set the monthly Murban official selling price (OSP), which is also Adnoc's Murban export term price. Adnoc for the first time set forward-looking official prices for March and April exports as a temporary exception "in response to unprecedented market conditions, and to provide better forward visibility to our customers", and will permanently move to forward-looking prices when the futures contract launches.
