OREANDA-NEWS. Argus WTI Houston swap futures listed on the Chicago Mercantile Exchange (CME) traded this afternoon for the first time since CME launched the financial contracts last month.

Several six-month strips traded for the second half of 2016, with parties locking in the differential for WTI Houston at premiums to WTI Cushing of $1.50/bl and $1.55/bl.

Trading of the swaps is a step toward the assessment being used for pricing what could become a robust US crude export trade from the US Gulf coast in the coming years.

The CME paper contracts enable physical traders, financial institutions and others to hedge price exposure to the market for light sweet crude at the Texas coast. The contract locks in the differential to WTI Cushing for WTI Houston. The contracts that traded today are trade month contracts, and settle on the Argus WTI Houston trade month average.

The physical WTI Houston spot market began growing in December 2014. Argus launched its WTI Houston assessment in time for the March 2015 trade month, but liquidity was slow to take off prior to the spot market developing later in 2015.

WTI Houston volumes traded in the spot market have been over 100,000 b/d in every trade month since December, except for February, when 93,310 b/d changed hands. So far for April just over 100,000 b/d of spot WTI Houston have traded, with less than half the trade month done.

WTI Houston is unique at the coast in that it consists solely of field quality WTI, arriving exclusively at the Magellan East Houston terminal from the Magellan/Plains All American 300,000 b/d BridgeTex pipeline and Magellan's 275,000 b/d Longhorn pipeline.