Understanding Crude Oil in the United States

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NYMEX WTI Crude Oil Futures Overview

NYMEX WTI Crude Oil futures is the world’s most liquid crude oil benchmark, providing access to global crude oil pricing with the most diverse set of futures and options contracts.

With WTI competing directly in the global energy markets as the price discovery leader, open interest continues to grow as customers hedge their oil market risk.

Volumes on NYMEX WTI Crude Oil futures (CL) and Crude Oil options (LO) have been strong, in part reflecting the higher levels of volatility in both crude oil and refined products.

U.S. Gulf Coast

The infrastructure investment in the U.S. Gulf Coast has transformed WTI into a waterborne crude, with extensive export capacity. The U.S. Gulf Coast comprises approximately 55% of the U.S. crude oil storage capacity, while Cushing comprises 13%.

The Houston market has become export-focused, with a terminal network with storage capacity of 65 million barrels and an additional 20 million barrels of storage capacity projected to come into service in 2017.

The WTI-Brent spread has become a true indicator of value for U.S. crude exporters. With the spread trading between a $1 and $2 per barrel discount to Brent, increased volumes of WTI-linked crude oils may flow to countries outside of the U.S. and Canada.

CME Group Offerings

CME Group offers a diverse a set of Crude Oil futures and options in North America to allow producers, refiners, consumers, importers and exporters to hedge their risk.

The LOOP Crude Oil Storage futures contract provides a unique logistical solution in the form of an exchange-traded, physically-deliverable futures contract for the crude oil market.

This contract enhances short-term crude oil storage price transparency and provides customers and industry participants with new risk management opportunities. This is an important tool to help manage the delivery of crude oil in the U.S. Gulf Coast market at LOOP’s Clovelly Hub.

Moreover, this contract enhances the liquidity of the existing LOOP Gulf Coast Sour Crude Oil futures (MB), which is physically-deliverable at LOOP.

Weekly options

Weekly Energy options are available for trading with greater precision, allowing for the greater customization of risk management with increased savings and more strategies.

Weekly Energy Options allow for:

Flexibility to manage short-term volatility and risk

Precision timing to target specific market movements or events

More expirations: four weeklies and one monthly

More ways to limit exposure

Shorter expirations to gain market exposure at a lower premium

For more information on this product please visit the CME Group product specifications page.

If you have any questions send a message or contact me

Peter Knight Advisor


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