ICE Gasoil Futures and Options at Record Open Interest with Record Q2 Trading Volumes in Gasoil Options

Rhea-AI Summary

Intercontinental Exchange (NYSE: ICE) reported record-breaking performance in its Low Sulphur Gasoil markets for June 2024. Open interest across futures and options reached a high of 1.2 million contracts on July 1, 2024, equivalent to 120 million metric tons. Gasoil futures and options open interest is up over 40% year-over-year, with trading volumes up 30%. Gasoil options hit record open interest of 234,570 contracts on July 3, with Q2 2024 seeing record trading levels of 287,421 options.

The success demonstrates the strength of the global benchmark following the EU's ban on Russian diesel. ICE Gasoil's physical delivery process has averaged over 100,000 tons monthly since early 2024, showcasing its alignment with EU sanctions on Russian oil. The contract continues to be the most liquid distillate benchmark, offering customers significant margin offsets when cleared alongside other oil positions at ICE.

Positive

• Record open interest of 1.2 million contracts across Gasoil futures and options
• 40% year-over-year increase in Gasoil futures and options open interest
• 30% year-over-year increase in Gasoil trading volumes
• Record Gasoil options open interest of 234,570 contracts
• Record Q2 2024 trading levels for Gasoil options with 287,421 contracts traded
• Successful adaptation to EU sanctions on Russian oil, maintaining liquidity as a global benchmark

Negative

• None.

Insights

Market Research Analyst

The record open interest and trading volumes in ICE Low Sulphur Gasoil futures and options highlight a significant trend in the energy markets. This surge likely reflects shifts in global oil trading patterns post the EU’s ban on Russian diesel. For retail investors, the key takeaway is the increasing reliance on ICE’s gasoil benchmarks, which implies a strong market position for ICE. The year-over-year growth rates of 40% in open interest and 30% in trading volumes are notable indicators of robust demand and market confidence. This development can bolster ICE’s revenue stream from trading and clearing services, given the potential increase in transaction fees. Furthermore, the margin offsets of up to 98% can attract more participants, amplifying liquidity and trading activity. However, it's important to monitor any geopolitical or economic factors that could impact these trends. Investors should also consider the long-term implications of the EU sanctions and how they might influence global oil supply and demand dynamics.

Financial Analyst

From a financial perspective, ICE's performance in the Low Sulphur Gasoil market is a positive signal. The records in open interest and trading volumes suggest increased trading activity, which can translate into higher revenue from fees. The alignment of the Gasoil contract with EU sanctions on Russian oil has likely contributed to its success, making ICE a critical platform for compliant trading. Retail investors should understand that such growth can support ICE’s financial health and potentially lead to higher stock valuations if these trends persist. Additionally, the diverse product complex offered by ICE, including Brent and WTI, provides a comprehensive risk management toolkit for traders, reinforcing ICE’s market leadership. However, it's essential to consider the volatility inherent in the oil market and how it can affect trading volumes and revenue in the short term.

Performance demonstrates strength of the global benchmark post the EU’s ban on Russian Diesel

LONDON--(BUSINESS WIRE)-- Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of technology and data, today announced that its Low Sulphur Gasoil markets hit a series of open interest records through June 2024, reaching a high of 1.2 million across futures and options on July 1, 2024, equivalent to 120 million metric tons.

ICE Low Sulphur Gasoil sits at the center of middle distillates trading as the global benchmark for refined oil products. Gasoil futures and options open interest is up over 40% year-over-year (y/y), with trading volumes up 30% y/y.

Gasoil options activity has been performing particularly well, hitting record open interest of 234,570 contracts on July 3, while Gasoil options traded at record levels in Q2 2024 with 287,421 options traded. During Q2 2024, a record of approximately 16.2 million oil options contracts traded at ICE, including a record 13.5 million Brent options contracts. Customers can benefit from margin offsets as high as 98% when clearing ICE Gasoil alongside other oil positions at ICE.

ICE Gasoil is a physically deliverable futures contract for what is now ultra-low sulphur diesel. An average of over 100,000 tons has entered the delivery process each month since the start of 2024, demonstrating the success of the benchmark following ICE’s changes to the methodology of the Gasoil contract to align it with sanctions preventing the delivery or export of Russian oil in the European Union which took effect from February 2023.

“More than 18 months on from ICE’s first successful delivery of Russian-free barrels of gasoil, the contract continues as the most liquid distillate benchmark,” said Jeff Barbuto, Global Head of Oil Markets at ICE. “For 43 years, ICE’s gasoil market has allowed customers to confidently participate in the physical delivery and trade of gasoil globally, and the record trading activity is a testament to the continued value participants find in the contract.”

ICE Low Sulphur Gasoil forms part of ICE’s global crude and refined product complex which includes Brent crude, the price barometer for three quarters of the world’s internationally traded crude oil, alongside ICE Midland WTI (HOU), ICE WTI (Cushing), ICE Dubai (Platts), ICE Murban, as well as NY Harbor RBOB Gasoline and Heating Oil. These benchmarks are supported by over 800 related oil products, giving participants the ability to manage the price points of products at the point of consumption or production around the world. Open interest in ICE’s global oil complex is up over 20% at 14 million contracts.

About Intercontinental Exchange

Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500 company that designs, builds and operates digital networks that connect people to opportunity. We provide financial technology and data services across major asset classes helping our customers access mission-critical workflow tools that increase transparency and efficiency. ICE’s futures, equity, and options exchanges – including the New York Stock Exchange – and clearing houses help people invest, raise capital and manage risk. We offer some of the world’s largest markets to trade and clear energy and environmental products. Our fixed income, data services and execution capabilities provide information, analytics and platforms that help our customers streamline processes and capitalize on opportunities. At ICE Mortgage Technology , we are transforming U.S. housing finance, from initial consumer engagement through loan production, closing, registration and the long-term servicing relationship. Together, ICE transforms, streamlines and automates industries to connect our customers to opportunity.

Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located here . Key Information Documents for certain products covered by the EU Packaged Retail and Insurance-based Investment Products Regulation can be accessed on the relevant exchange website under the heading “Key Information Documents (KIDS).”

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 – Statements in this press release regarding ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in ICE's Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 8, 2024.

Category: EXCHANGES

ICE- CORP

Source: Intercontinental Exchange

View source version on businesswire.com: https://www.businesswire.com/news/home/20240715489049/en/

ICE Media Contact:

Jess Tatham

jess.tatham@ice.com

+44 7377 947136



ICE Investor Contact:

Katia Gonzalez

katia.gonzalez@ice.com

(678) 981-3882

Source: Intercontinental Exchange

FAQ

What record did ICE Gasoil futures and options hit in June 2024?

ICE Gasoil futures and options hit a record open interest of 1.2 million contracts on July 1, 2024, equivalent to 120 million metric tons.

How much has ICE Gasoil futures and options open interest increased year-over-year?

ICE Gasoil futures and options open interest has increased by over 40% year-over-year.

What was the record open interest for ICE Gasoil options in July 2024?

ICE Gasoil options hit a record open interest of 234,570 contracts on July 3, 2024.

How many Gasoil options were traded in Q2 2024 on ICE?

A record 287,421 Gasoil options contracts were traded on ICE during Q2 2024.

How has ICE Gasoil adapted to the EU ban on Russian diesel?

ICE Gasoil has successfully maintained its position as the most liquid distillate benchmark, with an average of over 100,000 tons entering the delivery process each month since early 2024, aligning with EU sanctions on Russian oil.