Argus physical crude price assessments provide the foundation for an array of financial contracts, allowing precise and liquid risk management, revenue planning, and analysis. Financial exchanges ICE and CME host these financial contracts and use Argus physical prices to settle them.
Argus physical price assessments have been embraced in the US crude markets, for reflecting the market the way that it physically trades. For most grades, Argus assessments reflect the volume-weighted average of all spot physical trades done on each grade during each trading day. Argus physical assessments capture the broadest liquidity of actively traded US pipeline crude markets, within a clear quality and location specification, rather than using a narrow end-of-day pricing window, or limiting inclusion to certain trading venues.
In addition to offering precise hedging, Argus-settled financial contracts on ICE and CME allow paper traders in the world’s financial centres to gain financial exposure to globally important crude markets such as WTI Houston, WTI Midland, WCS Houston, Mars, LLS, WTL, Bakken and many others. As many of these physical grades are exported to Europe and Asia, the Argus-settled financial contracts on CME and ICE allow participants in regional markets around the world to have clear visibility on fundamental price movements in the US market, and to undertake timely and appropriate investment and risk-management policies.