ICE Futures Europe will introduce a Brent New Expiry, or Brent NX, contract on Dec. 5 to match changes made to the benchmark North Sea Dated Brent assessment by Platts, the exchange said.
The first New Expiry futures and options will be for December 2012 and will trade alongside current Brent contracts, the European unit of Atlanta-based IntercontinentalExchange Inc. said today in a statement following a three-week consultation with market participants.
“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 of ICE Futures Europe.
Platts, the energy news and pricing arm of McGraw-Hill Cos., announced on Sept. 16 that it will lengthen the date range for its Dated Brent assessment to 10 to 25 days forward from 10 to 21 days starting Jan. 6. The benchmark is used to price more than half the world’s oil.
The expiry of ICE Brent NX will align the futures market with forward markets and Dated Brent, the bourse said. The exchange will work with its members to migrate open positions for the December 2012 contract and beyond “to facilitate an orderly transition of open positions,” ICE said.
Platts said the changes may increase the number of cargoes delivered against Dated Brent and boost trading activity, or liquidity. Brent, Forties, Oseberg and Ekofisk blends, known collectively as BFOE, are used to price the benchmark.