9 March 2016

WTI Houston (Argus) financial futures listed on CME Group’s NYMEX exchange traded on Tuesday, 8 March, for the first time since the launch of the financial contracts last month. A total of 690 trade month contracts traded yesterday. They are settled on the WTI Houston trade month average index produced by commodity news and price reporting agency Argus.

Six-month strips traded for the second half of 2016, with parties locking in WTI Houston’s premium to WTI Cushing. WTI Houston is fast becoming an important benchmark following the lifting of US restrictions on crude exports this year. It represents the value of WTI light sweet crude on the US Gulf coast.

These futures contracts enable physical traders, financial institutions and others to hedge price exposure to the market for WTI light sweet crude at the Texas coast. The contract locks in the differential between CME Group’s WTI futures based at Cushing, Oklahoma, and the Argus price for physical WTI at Houston. CME Group launched six financial contracts that settle on Argus WTI Houston last month.

Trading of these contracts to hedge price risk is a key step towards WTI Houston as published by Argus being used as a pricing reference for crude exports from the US Gulf coast in the coming years.

“The use of the Argus WTI Houston crude oil futures contract by customers further demonstrates the confidence that financial markets have in our price discovery tools,” Argus Media executive chairman and publisher Adrian Binks said.

These contracts are available for trading on CME Globex and clearing through CME ClearPort.

For more information on Argus WTI Houston assessments and how the US Gulf coast is becoming the new centre for global oil benchmarks download the Argus white paper or read the article Argus WTI Houston swaps trade.