* New contracts to be available for trade on Dec. 7
* Two largest oil futures exchanges to list sour crude
LONDON, Nov 11 (Reuters) - IntercontinentalExchange (ICE) (ICE.N) will list two cash settled futures contracts tracking Argus Media’s sour crude index in early December, it said on Wednesday.
The most widely traded crude oil at present, used as the global benchmark, is light and sweet -- meaning it has a low sulphur content. Sour crude, like most of the oil produced by Saudi Arabia, contains more sulphur.
Sour crude output and demand are rising.
ICE’s announcement follows Saudi Arabia’s decision to switch to the sour crude index as the benchmark price for all grades of its crude oil sold to the United States.
The world’s two largest oil exchanges, ICE and NYMEX, will now list sour crude contracts.
“The new futures contracts are the ICE Argus Sour Crude Index (ASCI) Future, which is an outright contract, and the ICE Argus Sour Crude Index (ASCI) Differential Future, which is the differential between the ASCI and the West Texas Intermediate (WTI) price,” the exchange said in a statement.
WTI is sweet crude used as a benchmark and is deliverable to the current light sweet crude oil futures contract CLc1 on the CME Group New York Mercantile Exchange (NYMEX).
The new sour contracts will be listed by ICE Futures Europe and start trading on Dec. 7. They will be cleared by ICE Clear Europe.
Previously, ICE had announced availability of two ASCI-based cleared over-the-counter contracts on Nov. 13.
ICE lists one of the most widely traded global crude oil benchmarks, cash settled North Sea Brent crude futures LCOc1.
Late in October, CME had said the New York exchange planned to launch a cash-settled futures contract tracking the Argus sour crude index by year end and another contract for physical delivery sour crude at a later date. [ID:nN29247497]
CME said this move was in response to the decision by Saudi Arabia, the world top oil exporter.
State run oil firm Saudi Aramco had been using West Texas Intermediate crude prices published by Platts, a unit of McGraw Hill MHP.N, as its benchmark for U.S. crude sales. [ID:nWLA6760]
For a related interview, please see [ID:nN05126374] (Reporting by Ikuko Kurahone in London and Bangalore Equities Newsroom, editing by Anthony Barker)