Helping customers manage their physical crude oil storage price risk with price transparency and access to short-term storage.
LOOP LLC (LOOP) is the only port in the U.S capable offloading a wide range of vessels including Ultra Large Crude Carriers (ULLC) and Very Large Crude Carriers (VLLC) down to Medium Range (MR) Tankers.
The port consists of three single-point mooring buoys used for offloading of crude tankers and a marine terminal consisting of a two-level pumping platform and a recently 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. The Clovelly Hub provides interim storage for crude oil before it is delivered via connecting pipelines to refineries on the Gulf Coast and the Midwest.
In collaboration with the CME Group and LOOP, Matrix launched the world’s first crude oil storage futures contract in March 2015. By enhancing price transparency of monthly storage capacity along the U.S. Gulf Coast, LOOP Crude Oil Storage Futures help customers manage their physical crude storage price risk, while enhancing price transparency of, and access to, short-term (monthly) storage capacity along the U.S. Gulf Coast.
The contract is an important tool to help manage delivery of crude oil in the U.S. Gulf Coast market at LOOP’s Clovelly Hub. The contract also enhances liquidity of the existing LOOP Gulf Coast Sour Crude Oil Futures (CME: MB) contract, which is physically deliverable at LOOP. The re-launch of this contract, is a crucial tool for market participants, including refiners and U.S. and international producers, to manage their price risk without relying exclusively on the ubiquitous West Texas Intermediate crude contract.
Using its proprietary platform, Matrix hosts the online auction for LOOP Crude Oil Storage Futures and Physical Forward Agreements at 11 a.m. CT on the first Tuesday of each month.
Success at a glance
World’s first futures contract on crude oil storage capacity
Transformed how energy customers transact for storage
Reduced credit exposure for participants of the auction
Provided a transparent method by which customers can transact, establishing a market reference price