IntercontinentalExchange (NYSE: ICE), a leading operator of global regulated futures exchanges, clearing houses and over-the-counter (OTC) markets, today announced that ICE Futures Europe will introduce ICE Brent NX (New Expiry) Crude Futures and Options contracts. The contracts will be available for trading with a first trade date of 5 December 2011.
The introduction of ICE Brent NX Futures and Options contracts follows the close of the ICE Futures Europe consultation period which ran from 28 September to 21 October 2011 and which found market participants supportive of the new contract launch.
The first ICE Brent NX contract month available for trading will be December 2012, with new contract months listed out to December 2019. A first contract month of December 2012 provides a full year's advance notice to the market, whilst allowing participants to hedge their full 2013 calendar year exposure using ICE Brent NX contracts. The current ICE Brent Futures and Options contracts will continue to trade as normal until the completion of the transition to ICE Brent NX.
The expiry calendar for ICE Brent NX Futures and Options will align the futures market with the cash 'BFOE' (Brent-Forties-Oseberg-Ekofisk) forward and Dated Brent market which is changing from a 21-day to a 25-day basis from January 2012. To ensure ICE Brent NX contracts reflect future enhancements of the assessment of the North Sea physical market, a second change to a 'Month Ahead' expiry calendar will be implemented for the March 2015 contract month onwards.
"ICE Futures Europe is pleased to announce the launch of Brent NX Futures and Options contracts which reflects feedback gathered from a wide range of market participants during the recent consultation period. ICE Brent Futures are highly liquid with an average daily volume exceeding 606,000 contracts and open interest at record levels. The Brent NX contracts are designed to meet customer's global crude oil hedging needs and will help to ensure that the international growth in the use of Brent continues," said David Peniket, President, ICE Futures Europe.
During 2012, ICE Futures Europe will work with market participants to facilitate an orderly transition of open positions for the December 2012 contract month onwards from existing ICE Brent Futures and Options to the equivalent ICE Brent NX Futures and Options. Further details regarding the migration of open positions will be provided on a regular basis.
Since its introduction in 1988, the Brent contract has evolved to reflect changing market fundamentals in the North Sea and to consolidate its role as the leading oil futures benchmark globally, including grades in Africa, the Middle East and Asia.
On 23 June 2011, ICE Brent Futures achieved an all time record daily volume of 1,221,190 contracts. June 2011 also saw a record month trading activity with a total 12,976,247 contracts traded. Open interest in ICE Brent Futures reached a record 984,426 contracts after trading on 26 October on October 2011.
ICE also lists the North American benchmark West Texas Intermediate (WTI) Crude Futures contract and the ICE Gasoil Futures contract, the world's leading refined product benchmark, both of which have established record daily and monthly volumes in 2011.