Intercontinental Exchange Inc. · NYSE:ICE
Intercontinental Exchange — Investor Presentation (January 2022)
23 slides from Intercontinental Exchange's investor presentation, Jan 24, 2022
Slide 1: ICE Midland WTI American Gulf Coast Futures
ICE Midland WTI American Gulf Coast Futures Mike Wittner Head of Oil Market Research, ICE January 24, 2022
Slide 2: ICE Midland WTI American Gulf Coast (HOU) Futures
ICE Midland WTI American Gulf Coast (HOU) Futures ■ Why was the USGC contract restructured? ■ USGC crude fundamentals ■ Features of the ICE Midland WTI American Gulf Coast (HOU) crude oil futures contract ■ Live for trading on January 24, 2022 1
Slide 3: Why was the USGC contract restructured?
Why was the USGC contract restructured?
Slide 4: ICE Midland WTI American Gulf Coast (HOU) Futures: Why?
ICE Midland WTI American Gulf Coast (HOU) Futures: Why? ■ The market wants and needs a physically deliverable futures contract that is transparent, liquid and truly representative of today’s domestic market fundamentals ■ To meet the needs for scale and redundancy, Magellan, Enterprise, and ICE agre
Slide 5: WTI negative pricing in April 2020: A catalyst for change
WTI negative pricing in April 2020: A catalyst for change ICE Brent and NYMEX WTI Front Month Prices NYMEX WTI vs. ICE Brent - 5 Day Average 100 2 80 0 60 -2 40 -4 $/bbl $/bbl 20 -6 0 -8 -20 -10 -40 -12 ICE Brent Front Month Futures NYMEX WTI Front Month Futures Source: ICE & CME • April 20, 2020 cl
Slide 6: Key USGC crude price differentials drive exports & hedging
Key USGC crude price differentials drive exports & hedging Key Crude Price Differentials WTI/Brent Spread ICE Permian WTI vs. ICE WTI ICE Permian WTI vs. ICE Brent 10 5 0 $/bbl -5 -10 -15 Oct-18 Apr-19 Oct-19 Apr-20 Oct-20 Apr-21 Oct-21 Source: ICE & CME • Traders exposed to WTI where it meets the g
Slide 7: North American Crude Grade Differentials Open Interest
North American Crude Grade Differentials North America Crude Grade Differentials Open Interest - ICE and NYMEX combined 1,800,000 Argus WTI Midland vs WTI Trade Month Future 1,600,000 WTI 1st Line vs. Brent 1st Line Future 1,400,000 WTI 1st Line Future WTI vs Brent Spread Option 1,200,000 Open Inter
Slide 8: USGC Crude Fundamentals
USGC Crude Fundamentals
Slide 9: Key USGC fundamentals: US crude output & exports by destination
Key USGC fundamentals: US crude output & exports by destination US Crude Production (Mb/d) US Crude Exports by Destination (Mb/d) 13.0 4.0 3.5 12.0 3.0 11.0 2.5 Other 2.0 Canada 10.0 Asia 1.5 9.0 Europe 1.0 8.0 0.5 0.0 7.0 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021 Source: US EIA (l
Slide 10: Key USGC fundamentals: US crude exports by loading port
Key USGC fundamentals: US crude exports by loading port 3.5 3.0 2.5 2.0 MMBD 1.5 1.0 0.5 0.0 2018 2019 2020 2021YTD Corpus Christi Houston Louisiana Beaumont Source: SunMark Consulting and RBN Energy • US crude exports – 2021 YTD: 2.9 Mb/d • Houston: 0.8 Mb/d 2021 YTD (flat vs. 2020) • Corpus Christ
Slide 11: Features of the Contract
ICE Midland WTI American Gulf Coast Futures (HOU): Features of the Contract
Slide 12: Integrated ICE Midland WTI AGC Futures Contract (HOU)
Integrated ICE Midland WTI AGC Futures Contract (HOU) FUTURES CONTRACT OVERVIEW • Futures contract for physical delivery at MEH and ECHO, establishing consistent quality and price transparency in the Houston market Third • Sellers have the option to deliver to either the MEH or ECHO terminal Magella
Slide 13: ICE Midland WTI AGC (HOU) crude quality specs
ICE Midland WTI AGC (HOU) crude quality specs REQUIRED TEST PARAMETER UNITS MIN MAX METHOD ASTM D1298 or API Gravity ˚API, 60˚F 40.0 44.0 D5002 Sulfur Content % (m/m) 0.20 ASTM D4294 Mercaptan Sulfur Ppm Wt 75 UOP 163 RVP PSI 9.0 ASTM D6377 ASTM D4007 per BS&W % (v/v) 1.0 API MPMS 10.4 Nickel & Vana
Slide 14: Comparing Contract/Location Fundamentals
Comparing Contract/Location Fundamentals Houston’s Infrastructure Advantage MIDLAND WTI AMERICAN NYMEX WTI CUSHING “CL” CORPUS MARKET GULF COAST “HOU” Destinations: Destinations: Destinations: Enterprise / Magellan Enterprise / Enbridge N/A Capacity Capacity Capacity Storage: 63 MMBbls Storage: 37 M
Slide 15: Magellan and Enterprise Crude Systems
Magellan and Enterprise Crude Systems 14 Source: ICE, Magellan, and Enterprise
Slide 16: Magellan / Enterprise Combined Connectivity
Magellan / Enterprise Combined Connectivity 15 Source: ICE, Magellan, and Enterprise
Slide 17: Magellan / Enterprise Crude Storage Supporting Midland WTI AGC (HOU)
Magellan / Enterprise Crude Storage Supporting Midland WTI AGC (HOU) 16 Source: ICE, Magellan, and Enterprise
Slide 18: Midland WTI AGC (HOU) Supply
Midland WTI AGC (HOU) Supply The Houston Hub Source: ICE, Magellan, and Enterprise 17
Slide 19: Midland WTI AGC (HOU) Connectivity & Demand Centers
Midland WTI AGC (HOU) Connectivity & Demand Centers 18 Source: ICE, Magellan, and Enterprise
Slide 20: Combined Houston-Area Exports
Combined Houston-Area Exports Source: ICE, Magellan, and Enterprise 19
Slide 21: Summary and Conclusions
Summary and Conclusions
Slide 22: Summary and conclusions
Summary and conclusions ■ The pairing of the Magellan and Enterprise systems provides the needed redundancy in asset ownership, extensive connectivity and capability, and industry expertise that will provide the market with the utmost confidence in a successful contract. ■ Today, oil producers, refi
Slide 23: Contacts and resources
Contacts and resources For more information on ICE Midland WTI American Gulf Coast Futures (HOU) Mike Wittner – Head of Oil Market Research +1 646 733 5007 mike.wittner@ice.com Scott Mullervy – Director, US Crude & Options Market Development +1 713 210 4305 scott.mullervy@ice.com Kevin Kelly – Marke
Intercontinental Exchange — Investor Presentation (January 2022) on 6ix