ICE to launch new Brent NX crude contract December 5

Mon Nov 7, 2011 10:23am EST
 
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LONDON (Reuters) - Derivatives exchange ICE said on Monday it would launch its new Brent crude oil futures and options contract on December 5 with a first trading contract of December 2012 rather than February 2013 as initially proposed.

The new ICE Brent contracts, to be called New Expiry or NX Brent, are being launched to reflect a change in the way the underlying physical crude oil market in the North Sea is assessed and following consultation with market participants, the IntercontinentalExchange Inc (ICE.N: Quote) said.

NX futures and options contracts will have an expiry calendar based on 25 days instead of 21 days, mirroring an adjustment in how the forward cash crude market is assessed by oil price assessment service Platts.

ICE said in a statement the existing ICE Brent crude futures and options contracts with expiry months up to and including November 2012 would continue to operate in their present form and would be the exchange's only Brent contracts for those expiry months.

The existing Brent contracts and the new NX Brent contracts would trade in parallel for an undefined period, it said.

ICE said it would review the transition to the new contracts during the second quarter of 2012 "to consider whether any additional measures to encourage the migration of open interest would be appropriate."

ADVANTAGES

ICE conducted a consultation period of several weeks with oil companies, traders and brokers to get feedback on its proposals and amended its initial proposal slightly, bringing forward to first trading month by two months.

The exchange said the amended plan had several advantages:   Continued...