About LOOP Crude Oil Storage Capacity Allocation Contracts
Powered by the proprietary Matrix Auction Platform, Matrix’s monthly auction at LOOP optimizes the value of the facility’s storage assets through the use of CME-listed futures and physical bilateral agreements.
What Is the LOOP Auction?
The auction provides a transparent, competitive platform for individuals to bid on LOOP Sour Crude oil storage.
Auction participants will bid on Capacity Allocation Contracts (CACs). Each CAC gives the purchaser the right to store 1,000 barrels for one month.
Each month LOOP will auction storage capacity for commingled LOOP Sour Crude using the MAP. Monthly capacity available for any one month can be up to 7.2 million barrels.
LOOP CACs are two types: LOOP Storage Futures Contracts (SFC) and LOOP Physical Forward Agreements. LOOP Physical Forward Agreements (PFAs) are physical agreements that require storage capacity at LOOP to be delivered at settlement and are traded bilaterally in the physical market.
Matrix or an authorized broker will report the sale of LOOP SFCs and submit to the designated contract market operated by NYMEX immediately following acceptance of the allocation by the buyer after the auction in which they are awarded has ended.
Winning bidders in the auction can trade the CACs in the over-the-counter market, provided that the counterparty has signed all the documentation required.
The online auction is the first Tuesday of every month at 11 a.m. CT.
How Can You Access The Auction?
View the auction procedures, create an account, and log in to access the auction in real time.
A participant in the auction must be an eligible contract participant, as defined in the Commodity Exchange Act, and have a clearing account with a clearing member of the Chicago Mercantile Exchange Clearing House, which provides clearing services to the New York Mercantile Exchange, Inc.
The auction offers the world’s first futures contract on crude oil storage capacity.
LOOP crude oil storage futures contracts reduce credit exposure for auction participants.
The auction provides a transparent method by which customers can transact, establishing a market reference price.
barrels of storage capacity sold
About the LOOP Oil Platform and Sour Crude
LOOP is the only port in the U.S capable offloading a range of vessels including ultra large crude carriers. The port consists of three single-point mooring buoys used for offloading crude tankers and a marine terminal consisting of a two-level pumping platform and a three-level control platform.
The Clovelly Hub is located twenty-five miles inland and is connected to the port complex by a 48-inch diameter pipeline. It provides interim storage for crude oil before it is delivered via connecting pipelines to refineries on the Gulf Coast and in the Midwest.
S&P Global Platts publishes the price assessment for LOOP Gulf Coast Sour Crude Oil Futures among other crude grades. The price assessment is an important indicator of how aggressively U.S. refiners compete with Asian refiners for medium sour crudes.