ICE to launch new marine fuel 0.5% futures contracts in early-2019

Intercontinental Exchange, Inc. (ICE) is planning to launch a new marine fuel 0.5% futures contracts early next year in advance of IMO’s global 0.5% sulphur cap regulation from 2020.

The new contracts, developed in response to expected market demand starting January 2020, are scheduled to start on 4 February 2019, subject to completion of relevant regulatory process.

The latest offering by ICE follows a previous announcement by New York Mercantile Exchange (NYMEX) on the launch of 11 marine fuel 0.5% futures contracts from 9 December. Platts reported that thus far, traders have adopted a wait-and-see approach on this new instrument.

Both futures contracts will settle against S&P Global Platts physical marine fuel 0.5% assessment.

Read more: NYMEX to list 11 marine fuel 0.5% futures contracts ahead of IMO sulphur cap

The ICE new futures contracts include Fuel Oil Outright - Marine Fuel 0.5% FOB Rotterdam Barges (Platts) Future; Fuel Oil Outright - Marine Fuel 0.5% FOB Singapore (Platts) Future; Fuel Oil Diff - Marine Fuel 0.5% FOB Rotterdam Barges (Platts) vs 3.5% FOB Rotterdam Barges (Platts) Future; Fuel Oil Diff - Marine Fuel 0.5% FOB Singapore (Platts) Future vs 380 CST Singapore (Platts) Future; Fuel Oil Outright - Marine Fuel 0.5% FOB USGC Barges (Platts) Future; and Fuel Oil Diff - Marine Fuel 0.5% FOB USGC Barges (Platts) vs USGC HSFO (Platts) Future.

“Our customers have expressed a strong desire for Marine Fuel 0.5% specific derivative contracts and our new contracts will allow market participants to hedge forward positions in an industry which today consumes more than three million barrels per day of high sulphur fuel oil,” said Jeff Barbuto, vice president of oil markets at ICE.

“The contracts will operate alongside ICE’s benchmark Low Sulphur Gasoil futures, fuel oil and LNG markets providing customers with a range of hedging tools to assist with the transition to the new regulations in 2020,” Barbuto added.

Posted 14 December 2018

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Lee Hong Liang

Asia Correspondent

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