ADNOC is a key participant in the launch of Abu Dhabi's oil futures contract early next year. Image Credit: Gulf News Archive

Dubai: Intercontinental Exchange (ICE), which operates the New York bourse, plans to launch ICE Futures Abu Dhabi (IFAD) and trading in Murban crude oil futures contracts late in the first quarter of 2021. Last year, ICE announced plans to launch IFAD with the Abu Dhabi National Oil Company (ADNOC) and nine of the world’s largest energy traders, including BP, Shell, Total and Vitol.

IFAD will host the world’s first futures contracts based on ADNOC’s flagship Murban crude oil – a light sweet crude that represents more than half of the energy giant’s output. Lighter variants of crude are easier to process into gasoline and diesel and therefore are in high demand.

A futures contract is one for assets bought at an agreed price but delivered at a later date. With the help of Murban futures, oil investors and traders will be able to easily buy or sell the crude oil in the marketplace.

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“Subject to the completion of regulatory approvals, ICE plans to launch IFAD and trading in Murban futures contracts late in the first quarter of 2021. A more specific date for the launch of trading will be announced in due course,” ICE said in a statement.

It will be a physically delivered contract with delivery at Fujairah on a free-on-board (FOB) basis. ICE Murban Futures will be complemented with a range of cash settled derivatives, which IFAD plans to launch for Day One of trading, the statement said.