ICE Midland WTI (HOU) Futures Reach All-Time Daily Volume Record

Rhea-AI Summary

Intercontinental Exchange (NYSE: ICE) announced that its ICE Midland WTI (HOU) crude futures reached a record daily volume of over 100,000 contracts on May 13, 2024. The HOU futures have shown significant growth in 2024, with an average daily volume surge from 16,700 in April to over 29,000 in May. Year-over-year, the open interest for HOU increased by over 190%. The contract is recognized for its quality and reliable delivery, important during times like the scheduled maintenance of the Wink to Webster pipeline in June 2024. ICE provides various contract spreads and margin offsets, enhancing customer risk management with over 800 oil contracts available. Overall, ICE's total oil complex open interest rose by 20% year-over-year, reaching 14 million contracts.

Positive

• Record daily volume of over 100,000 contracts for ICE Midland WTI (HOU) on May 13, 2024.
• Average daily volume increased from 16,700 in April to over 29,000 in May 2024.
• Open interest for HOU up over 190% year-over-year.
• ICE HOU recognized for quality and reliable delivery.
• Margin offsets provided up to 98% when clearing HOU alongside other oil positions.
• Open interest across ICE's total oil complex up 20% year-over-year, reaching 14 million contracts.

Negative

• Potential impact from scheduled maintenance of the Wink to Webster pipeline in June 2024.
• Exclusion of trades from the Wink to Webster pipeline from Argus MEH assessment may affect market dynamics.

Insights

Financial Analyst

The recent surge in trading volume for ICE Midland WTI (HOU) futures is noteworthy. It demonstrates increased market confidence and liquidity in this specific contract. As trading volumes hit an all-time high with over 100,000 contracts in a single day, this indicates a heightened interest from market participants. The significant increase in open interest (OI) by 190% year-over-year also suggests a growing commitment to these positions, likely driven by the contract's utility in hedging and speculation.

This development could have several positive implications for ICE. Higher trading volumes and open interest typically lead to increased revenue from transaction fees. Furthermore, the ability to offer margin offsets as high as 98% when clearing HOU alongside other oil positions adds a compelling value proposition to traders, making it a more attractive platform.

However, it’s important to stay cautious about external factors that could affect the oil market, such as geopolitical tensions, regulatory changes and global economic conditions. The focus on the planned maintenance of the Wink to Webster pipeline could introduce short-term volatility, but the exchange-guaranteed quality and delivery assurances should mitigate some of these risks.

For retail investors, this news might indicate robust health and growing utility of ICE’s oil futures trading platform, potentially translating to sustained revenue growth for the company.

Market Research Analyst

The record-setting volume in ICE Midland WTI futures underscores the evolving dynamics in the crude oil market. The HOU contract’s ability to match the globally accepted Midland-WTI quality and its physical deliverability at the U.S. Gulf Coast for export to Asia and Europe positions it distinctively. This alignment with international standards likely drives its growing adoption, as seen in the significant rise in average daily volumes and open interest.

The mention of scheduled maintenance on the Wink to Webster pipeline highlights the importance of reliable infrastructure in the oil supply chain. This maintenance could impact short-term supply dynamics, but ICE’s strict quality and delivery rules for HOU contracts provide a layer of reliability and trust that market participants find valuable.

For investors, this development could indicate strong market fundamentals and increased reliance on HOU futures for hedging and trading, potentially forecasting sustained engagement and growth in this segment.

HOUSTON--(BUSINESS WIRE)-- Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of technology and data, today announced that its ICE Midland WTI (ICE:HOU) crude futures contract hit its highest volume day on May 13, 2024, with over 100,000 contracts traded.

The volume activity follows records set in the HOU futures contract in 2024, including record average daily volume of 16,700 contracts during April, rising to over 29,000 contracts during May 2024, based on month-to-date trading activity. Alongside this, HOU open interest (OI) is up over 190% year-over-year (y/y).

“It’s great to see the market utilize HOU as the only exchange-guaranteed source of ratably delivered Midland WTI barrels,” said Jeff Barbuto, Global Head of Oil Markets at ICE. “HOU is where U.S. production meets global demand, and the quality spec of ICE HOU matches the globally accepted Midland-WTI quality. Physical cargoes load at the U.S. Gulf Coast for export to Asia and Europe, where HOU-quality barrels are accepted in the Platts Dated Brent assessment.”

“Right now, the U.S. Gulf Coast market is focused on the scheduled maintenance of the Wink to Webster pipeline due in June 2024, with Argus announcing that all trades originating from this pipeline will be excluded from their MEH assessment,” continued Barbuto. “The ICE HOU contract rules state that HOU must be on-spec and be delivered ratably. These are the times when exchange-guaranteed quality and deliveries show their value.”

ICE’s rules state, “It is the Seller’s obligation to ensure that the Product receipts are available to begin flowing ratably at the Specified Terminal by the first day of the delivery month." Full contract rules can be found here: https://www.ice.com/publicdocs/contractregs/179_SECTION_7A1.pdf

ICE offers HOU time spreads, as well as inter-commodity spreads with Brent and WTI Cushing (Domestic Light Sweet) to help customers mitigate price risk between locations and grades. Meanwhile, customers can benefit from margin offsets as high as 98% when clearing HOU alongside other oil positions cleared at ICE. Offsets are available across a range of over 800 oil contracts, including ICE Brent, ICE Gasoil, ICE WTI, ICE Dubai (Platts), ICE Murban, as well as RBOB Gasoline. OI across ICE’s total oil complex is up over 20% y/y 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/20240517052593/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 Midland WTI (HOU) futures reach on May 13, 2024?

ICE Midland WTI (HOU) futures reached a record daily volume of over 100,000 contracts on May 13, 2024.

How has the average daily volume of ICE Midland WTI (HOU) futures changed in 2024?

The average daily volume of ICE Midland WTI (HOU) futures increased from 16,700 contracts in April to over 29,000 contracts in May 2024.

What is the year-over-year change in open interest for ICE Midland WTI (HOU) futures?

The open interest for ICE Midland WTI (HOU) futures increased by over 190% year-over-year.

Why is the ICE Midland WTI (HOU) contract important?

The ICE Midland WTI (HOU) contract is important for its quality, reliable delivery, and for meeting global demand with U.S. production.

What margin offsets are available for ICE Midland WTI (HOU) futures?

Margin offsets of up to 98% are available when clearing HOU alongside other oil positions at ICE.

How has the open interest across ICE's total oil complex changed year-over-year?

The open interest across ICE's total oil complex increased by 20% year-over-year, reaching 14 million contracts.

What impact might the scheduled maintenance of the Wink to Webster pipeline have?

The scheduled maintenance of the Wink to Webster pipeline in June 2024 may impact market dynamics as trades from this pipeline are excluded from the Argus MEH assessment.