Market insight papers
Argus USGC UCO – CME Contracts for Hedging Exposure
The paper outlines market dynamics, pricing trends, and a real-world hedging scenario using CME contracts.
Used Cooking Oil (UCO) has become a key feedstock in the renewable fuels market, driven by sustainability mandates and low-carbon fuel policies. The Chicago Mercantile Exchange (CME) has launched Argus-based UCO futures contracts to help market participants hedge price risks. With rising demand and policy incentives like the 45Z tax credit, UCO prices have rebounded after a decline. These futures offer a vital tool for managing volatility and basis risk, especially for producers of renewable diesel and sustainable aviation fuel.
Key Bullet Points:
- Market Growth
- Policy Impact
- CME Contracts
- Hedging Example
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As a leading authority on energy and commodity markets across the globe, Argus is uniquely positioned to provide in-depth analysis and expert thought leadership. Our white papers are carefully written by Argus specialists from across our company. Each white paper focuses on a topical theme, exploring areas such as supply and demand dynamics, price trends, trading activity, and changing regulations. We always aim to provide a balanced view, underpinned by data and insight gathered firsthand from the market.