Magellan Midstream, Enterprise Combine to Develop Houston Oil Futures Contract
(Reuters) — Magellan Midstream and Enterprise Products plan to combine forces to develop a futures contract for the physical delivery of crude oil in the Houston area, after two years of separately working on contracts with exchanges.
The midstream infrastructure companies said the project is in response to market interest for a Houston-based index with greater scale and price transparency.
Quality specifications will be consistent with West Texas Intermediate (WTI) crude oil originating from the Permian Basin, with delivery capabilities at either Magellan's East Houston terminal or Enterprise's ECHO terminal.
Houston represents the most comprehensive and complete market for Permian WTI and is the most logical physical location to establish a new futures contract, Magellan spokesman Bruce Heine told Reuters.
"We have both been trying to develop our own futures contracts, to various degrees of success. What has become clear is that we can provide a better overall market solution by working together which benefits all market participants."
The WTI contract is the benchmark for U.S. crude oil prices.
Enterprise spokesman Rick Rainey said the decision on which platform will host the futures contract is still under evaluation.
In 2018, the Intercontinental Exchange launched a WTI contract with price, settlement and delivery at Magellan's terminal in East Houston.
Enterprise separately agreed to use its Houston hub for a WTI futures contract with CME Group Inc.
Related News
Related News
- Keystone Oil Pipeline Resumes Operations After Temporary Shutdown
- Freeport LNG Plant Runs Near Zero Consumption for Fifth Day
- Biden Administration Buys Oil for Emergency Reserve Above Target Price
- Mexico Seizes Air Liquide's Hydrogen Plant at Pemex Refinery
- Kinder Morgan Declares Force Majeure on West Texas Gas Pipeline After Fire
- Venezuela Proposes Alternative Payment Plan as Weak Bids Surface in Citgo Auction
- Baker Hughes Wins Contract for Huge Aramco Gas Expansion Project
- Enbridge Picks Contractors for Great Lakes Tunnel Project, Securing Line 5 Pipeline Route
- Russia's Gazprom Sees Worst Loss in Decades as European Gas Sales Collapse
- Shell Nigeria Inks $100 Million Gas Pipeline Deal with Oyo State
Comments