Intercontinental Exchange, Inc. (NYSE:ICE) announced today that the ICE Midland WTI crude futures contract (ICE:HOU) hit a record open interest of 158,208 contracts on June 13, 2024, after market participants last week added more than 100,000 lots of HOU to their books .
ICE HOU increased from an average daily volume (ADV) of 1,794 in 2022, to an ADV of 6,695 contracts in 2023, to record an ADV of 27,560 during May 2024.
“Clients are moving positions in ICE HOU as the contract offers them greater optionality,” said Jeff Barbuto, Global Head of Oil Markets at ICE. “The Houston market has changed dramatically since the price reference companies started valuing Midland WTI in Houston about 15 years ago. Since then, production sent to Houston has increased, infrastructure has been expanded to many times its previous capacity, the US export ban has been lifted, all contributing to the US exporting an average of 4.2 million barrels per day, with most of to be Midland WTI. “
ICE HOU pricing reflects current fundamentals in Houston, delivering natural crude to two of the largest US Gulf Coast crude systems, the ONEOK Magellan East Houston (MEH) and Enterprise Crude Houston (ECHO) terminals. Both are connected to Platts-approved water terminals to deliver Midland WTI to Brent. HOU is the only guaranteed exchange source of reasonably deliverable Midland WTI, with HOU quality specifications matching Platts specifications for Midland WTI.
Over 12 million barrels of crude are delivered against HOU futures each month. This includes EFPs (Exchange for Physicals), which allow customers the flexibility to deliver barrels to other locations, as well as flexible delivery dates. Meanwhile, ICE HOU time spreads, as well as spreads with Brent and WTI Cushing (domestic sweet), help clients mitigate price risk across locations and grades.
Clients can benefit from margin offsets of up to 98% when clearing HOU along with other oil positions cleared on ICE. Offsets are available on a range of more than 800 oil contracts, including ICE Brent, ICE Gasoil, ICE WTI (Cushing), ICE Dubai (Platts) and ICE Murban, as well as gasoline and heating oil NY Harbor RBOB.
In ICE’s global oil group, open interest stands at 14.4 million contracts, up 24% year-on-year. Alongside record highs in Midland WTI, ICE futures hit a record open interest of 793,288 contracts on June 10, 2024. Oil is a part of ICE’s extensive global commodity markets, where OI stands at 62 million contracts, up 26 % per annum y. Meanwhile, total ICE futures and options hit a record open interest of 98.4 million contracts on June 13, 2024.