About

crude oil storage

About Matrix Markets

Using significant experience in the energy derivative and physical markets to create new contracts and ways to transact.

The Matrix Model at LOOP

Founded in 2014, Matrix Market’s first initiative was the highly successful launch of the world’s first futures contract on crude oil storage capacity, developed jointly by the management of Matrix, the Chicago Mercantile Exchange (CME), and LOOP LLC (LOOP), the largest privately held crude storage facility in the U.S.

Through the creation of proprietary short-term physical bilateral agreements and financial derivatives products, the program offers:

  • Ease of access
  • More transparency to price
  • Reduced credit exposure
  • Ability to tailor storage requirements to physical need

Participants include traders and refiners. Traditional storage customers have readily adopted the electronic storage auction program and are active participants.

Equally important to the creation of the storage futures concept is the reintroduction of a physically deliverable LOOP Gulf Coast Sour Crude Oil Futures contract. While the highly successful WTI Crude Oil contract provides adequate flat price risk protection, refiners and many U.S. and international producers face significant basis risk.

 

Industry Achievements and Market Benefits

Transparency

The Matrix auction platform gives immediate price discovery to the value of storage

Credit Disintermediation

Through the CME clearing process, counterparty risk is removed

Increased Liquidity

Removing credit barriers and improving the ease of acquisition attracts new participants that are interested in short- and intermediate-term storage solutions

Flexibility

Being able to acquire storage on an as-needed basis provides users the ability to match their acquisition with their financial or physical requirements

Future Applications

Using its proprietary platform, Matrix has hosted the auction for LOOP Crude Oil Storage Futures since 2015. The contract has ranked in the top 10 CME crude oil contracts, as measured by open interest. This unparalleled success brings transparency to a historically opaque market and has the potential to become an industry standard for such transactions.