ICE's new Houston crude futures contract begins trading

A screen displays the logo and ticker symbol for Intercontinental Exchange, Inc. on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 3, 2016. REUTERS/Brendan McDermid

NEW YORK (Reuters) - Intercontinental Exchange Inc said its new Permian West Texas Intermediate (WTI) crude oil futures contract deliverable in Houston, Texas, will begin trading on Monday.

The trade month will be December and the contract will be deliverable at Magellan Midstream Partners LP’s East Houston terminal, ICE said in a statement.

On Monday, ICE will list 36 months of flat-price Permian WTI contracts and calendar spreads, as well as inter-commodity spreads for the Houston contract versus Brent and the Houston contract versus WTI.

The primary U.S. futures contract is delivered at the storage hub in Cushing, Oklahoma, as has been the case since the contract was started in the early 1980s.

However, U.S. crude exports have surged after Washington lifted a decades-long ban, making Gulf Coast markets liquid and the sought-after destination for producers to send their barrels.

“Houston has become the pricing center for U.S. crude oil production and exports, and the new Permian WTI futures contract is designed to serve hedging and trading opportunities in this growing market,” ICE said in a statement.

The company first announced the contract in July, following which rival CME Group Inc said in September it would offer a new WTI Houston crude futures contract with three physical delivery locations on the Enterprise Products Partners LP’s Houston system, beginning in the fourth quarter.

Reporting by Devika Krishna Kumar in New York; Editing by Matthew Lewis