Ice to launch Murban crude futures in March

The Intercontinental Exchange (Ice) said today that it will launch Abu Dhabi's new Murban crude futures contract on 29 March.

The contract had been due to start trading in the first half of this year, but Ice postponed the launch in May because of Covid-19 and huge volatility in the Ice Brent and Nymex WTI futures contracts. The launch is subject to completion of regulatory approvals, Ice said.

Abu Dhabi's state-owned Adnoc selected Ice to host its Murban contract in November last year. 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. Some of the largest oil trading houses have said the contract will provide greater liquidity and transparency in the Asia-Pacific market.

The Murban futures contract will likely trade cargoes loading two months ahead, in line with standard practice for the bulk of Mideast Gulf spot crude cargoes that trade in the Asia-Pacific market. The contract will set the monthly Murban official selling price (OSP), which is also Adnoc's Murban export term price.

By Caroline Varin