CHICAGO, March 4, 2015 /PRNewswire/ -- CME Group, the
world's leading and most diverse derivatives marketplace, LOOP LLC,
operator of the largest privately-owned crude oil terminal in the
U.S., and NEO Markets, Inc., a leading online marketplace for U.S.
physical oil transactions, today announced they had reached a
definitive agreement to develop the first-ever physically delivered
crude oil storage futures contract. The new LOOP Crude Oil Storage
futures contract will begin trading on Sunday, March 29, 2015, for trade date
Monday, March 30, 2015, pending all
relevant CFTC regulatory review periods.
This new contract will provide market participants with an
innovative, exchange-traded futures contract based on crude oil
storage capacity at LOOP's Clovelly Hub in Louisiana, beginning with the May 2015 contract month. Each futures contract
will represent the right to store 1,000 barrels of crude oil at the
hub for a specific calendar month.
The new storage contract is expected to enhance the liquidity of
the existing NYMEX Gulf Coast Sour Crude Oil futures contract,
which is physically deliverable at LOOP and will be renamed LOOP
Gulf Coast Sour Crude Oil futures. As part of the agreement, CME
Group will also broaden the specifications of this sour crude
futures contract to include Poseidon, Mars and LOOP Seg 17.
"As global crude oil supply and demand dynamics continue to
shift, CME Group remains focused on meeting the risk management
needs of our energy customers," said Martin
Fraenkel, Managing Director, Global Head of Energy Products,
CME Group. "We believe this innovative new solution will help
customers manage their physical crude storage price risk, while
enhancing price discovery and access to short-term storage capacity
along the U.S. Gulf Coast."
"We are pleased to be providing the physical storage capability
for this ground-breaking new storage futures contract," said
Tom Shaw, President, LOOP LLC.
"LOOP's reliability record, unparalleled market connectivity,
extensive supply of medium sour crude and significant storage
capacity provide the market a unique storage opportunity on the
Gulf Coast."
"Together with CME Group and LOOP, we are bringing to market the
first-ever storage capacity futures for crude oil," said
J. Robert Collins, Jr., Co-CEO and
President, NEO Markets, Inc. "By
offering storage rights to a broader market through these new
futures contracts, we expect to provide greater transparency, ease
of access, liquidity, flexibility and security of supply for
companies dependent on Gulf Coast oil deliverability."
NEO Markets will be hosting monthly auctions of physical LOOP
Sour crude oil storage contracts on its NEO Trader platform.
Following the auctions, subsequent over-the-counter transactions
can be negotiated via the NEO Trader platform and NEO's voice
broker services.
Both contracts will be available for trading electronically via
CME Globex as well as submission for clearing through CME
ClearPort, and will be listed by and subject to the rules of
NYMEX.
About CME
Group
As the
world's leading and most diverse derivatives marketplace, CME Group
(www.cmegroup.com) is where the world comes to manage risk. CME
Group exchanges offer the widest range of global benchmark products
across all major asset classes, including futures and options based
on interest rates, equity indexes, foreign exchange, energy,
agricultural commodities, metals, weather and real estate. CME
Group brings buyers and sellers together through its CME Globex®
electronic trading platform, its trading facilities in New York and Chicago, and through its London-based CME Europe derivatives
exchange. CME Group also operates one of the world's leading
central counterparty clearing providers through CME Clearing and
CME Clearing Europe, which offer clearing and settlement services
across asset classes for exchange-traded contracts and
over-the-counter derivatives transactions. These products and
services ensure that businesses everywhere can substantially
mitigate counterparty credit risk.
CME Group is a trademark of CME Group Inc. The Globe Logo, CME,
Globex and Chicago Mercantile Exchange are trademarks of Chicago
Mercantile Exchange Inc. CBOT and the Chicago Board of Trade are trademarks of the
Board of Trade of the City of
Chicago, Inc. NYMEX, New York Mercantile Exchange and
ClearPort are registered trademarks of New York Mercantile
Exchange, Inc. COMEX is a trademark of Commodity Exchange,
Inc. All other trademarks are the property of their
respective owners. Further information about CME Group (NASDAQ:
CME) and its products can be found at www.cmegroup.com.
About LOOP LLC
LOOP LLC owns and operates a deepwater
port and associated onshore terminal with significant crude oil
handling and re-distribution capabilities in Clovelly, Louisiana.- The Clovelly Hub.
Since beginning operations in 1981, LOOP has become an essential
energy transport hub, receiving and storing crude oil for delivery
to the nation's refineries. Through operational excellence, LOOP
has safely received and delivered over 11 billion barrels of crude
oil to America's refineries for production of gasoline, diesel,
home heating fuel, kerosene, asphalt and other petroleum
products.
The Clovelly Hub in South
Louisiana is the heart of LOOP's crude oil distribution
network. With 70 million barrels of storage capacity, the Hub
stores crude oil from all over the world and provides ready access
to many of the nation's largest refineries. For more information
about LOOP visit www.LOOPLLC.com.
About NEO Markets, Inc.
NEO Markets was formed in 2012
to provide oil traders, hedgers, producers, refineries and
investors with comprehensive access to the global physical and
financial crude oil marketplace. By combining the best assets of
HoustonStreet Exchange Inc. with newly developed technology, NEO
Markets is deploying a state-of-the-art
platform coupled with an innovative voice
broker team that eliminates trading friction by providing open
access to all of the world's oil markets.
NEO Markets has created a new marketplace experience offering
unprecedented trading speeds, enhanced operational efficiency,
comprehensive liquidity and tighter bid ask spreads. It's an
entirely new approach that allows access to all oil products in any
location on a single screen complimented by coordinated voice
broking execution.
Through its unique integration of bilateral and cleared markets,
NEO Markets facilitates tighter bid-ask spreads in the physical
crude oil grades and offers substantially reduced total transaction
costs than what is currently available in the OTC markets.
Additionally, traders will be able to seamlessly manage their price
exposure through sophisticated NEO Markets execution features for
futures and options trading on CME Group exchanges. Traders
can finally take control of their trading and manage execution in
any manner they choose.
Open access and boundless opportunity are now at your
fingertips.
CME-G
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SOURCE CME Group