CME launches new Argus based NYH RBOB contract

The CME group has launched a new Argus Media-based New York Harbor RBOB gasoline contract.

The contract is a floating price, monthly derivatives products — a "swap" — that will be cleared by the CME's Nymex divison.

The new offering was made available to traders on 24 October.

Each month the contract will be settled using Argus' New York Harbor RBOB barge gasoline assessments. The final floating price for the month will be calculated from this assessment using the arithmetic average of Argus' assessed mid-point of the high and low all day range of trade.

"This new contract is the result of customer demand for a more diverse set of gasoline contracts in the New York Harbor," CME senior director of corporate communications Chris Grams said. "We believe this contract will provide customers with increased optionality for managing their East Coast gasoline price risk. Additionally, customers will have the ability to manage the differential between these gasoline futures contracts using our RBOB NY RBOB (Argus) vs. RBOB Gasoline futures contract."

RBOB gasoline is a reformulated blend of gasoline that uses ethanol as a pollution-reducing oxygenate. It is widely produced across the US and used in the country's more populous areas. RBOB is also the basis of the Nymex gasoline future's contract.

Argus' New York Harbor RBOB barge assessment is the benchmark gasoline assessment in the US Atlantic coast.

More than 40pc of the gasoline produced in PADD 1 is RBOB, according to the US Energy Information Administration, and more than 30pc of the regions imports are also RBOB.