The InterContinental Exchange (ICE) on Monday launches its first set of derivatives linked to the West African crude oil market, aimed at an industry that has called for a strengthening of the dated Brent benchmark.

Traders will be able to use the ICE platform from Sept. 17 to trade a derivatives contract linked to Nigeria’s four largest crude oil grades – Bonny Light, Forcados, Qua Iboe and Bonga. The cash-settled future will be based on a daily assessment by pricing agency S&P Global Platts for a “WAF index” backed by the four grades, each of which will carry a weighting of 25 percent, according to a note on the ICE website.

The contract will be based on the differential of the four crudes to the dated Brent benchmark price and will represent 1,000 barrels of oil. Dated Brent is currently underpinned by five North Sea crudes – Brent itself, Forties, Oseberg, Ekofisk and Troll. That quintet together accounts for less than 1 percent of the roughly 99 million barrels per day of global oil production.

Source: Hellenic Shipping News

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