Magellan, Enterprise and Intercontinental Exchange Jointly Establish New Houston Crude Oil Futures Contract
An official news release shows that Magellan Midstream Partners, L.P. (NYSE: MMP) and Enterprise Products Partners L.P. (NYSE: EPD) have teamed up with the Intercontinental Exchange, Inc. (NYSE: ICE), a Fortune 500 company that designs, builds and operates digital networks, to jointly establish a new futures contract for the physical delivery of crude oil in the Houston area. The Midland WTI American Gulf Coast contract will utilize the capabilities and global reach of ICE's industry-recognized, state-of-the-art trading platform and is due to be launched by ICE by early 2022, subject to regulatory approval.
It is said the new futures contract is being launched in response to market interest for a Houston-based index with greater scale, flow assurance and price transparency. Its quality specifications will be consistent with a West Texas Intermediate (“WTI”) crude oil originating from the Permian Basin with common delivery options at either the Magellan East Houston ("MEH") terminal or the Enterprise Crude Houston ("ECHO") terminal.
Brent Secrest, executive vice president and chief commercial officer of Enterprise's general partner said, "We are excited about this new crude oil futures contract, which features the combined strength of two extensive and complementary networks of midstream assets with a world-class trading platform to provide customers with greater supply reliability, flexibility and price transparency. "
"Magellan is pleased to join forces with Enterprise and ICE to offer this leading-edge joint futures contract," said Aaron Milford, Magellan's chief operating officer. "The new contract improves the transparency, flexibility and marketability of Midland WTI crude oil for Gulf Coast and export customers while maintaining industry-recognized quality and consistency."
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