Global energy and commodity price reporting agency Argus has broken new ground with the launch of an Argus Crude Market Ticker (ACMT), an application that will provide unparalleled transparency in two of the world’s most important crude oil markets, those for WTI Houston and WTI Midland. The volume of physical and derivative trade in these grades is what makes the US Gulf Coast market one of the most transparent physical trading hubs in the world.
ACMT will give market participants hourly bid and offer ranges for Permian quality WTI traded at Houston and Midland, between 7 am and 4 pm CT. The ticker can be accessed directly from Argus via a web application, as a data feed, or through CME Group’s trading front-end CME Direct.
The US is said to be the world’s largest crude oil producer and is now one of its largest exporters. Since a ban on US crude exports was lifted in 2015, the Gulf Coast has emerged as a key source of light sweet crude, which is shipped all over the globe, to Europe, Asia, and South America. An active spot market has developed, with a broad range of participants and high trade volumes, making the hub the most transparent and efficient in the world. Argus reports daily trade for Permian WTI Midland and WTI Houston of more than 1.5mn barrels. Financial swaps settled on Argus assessments for these grades are traded on both the CME NYMEX and ICE exchanges. Combined open interest of more than 367,000 lots makes this the world’s third-largest crude derivatives market (367,000 lots is the equivalent of 367mn barrels of crude oil, or more than three and a half times total world oil demand).
The volume of physical trade, diversity of participation, and underlying production in the USGC set this market apart from others, such as the North Sea, where the Dated Brent benchmark is struggling with ever-dwindling underlying crude oil output.
Adrian Binks, chairman, and chief executive of Argus Media said: “USGC markets are among the best functioning crude markets in the world, and market participants around the world are keen to understand and participate in these important markets. We are pleased to have been able to work with the industry to add additional transparency to this vibrant trading hub”.
