CME Group, the world's leading and most diverse derivatives marketplace, today announced it will amend its benchmark New York Harbor Heating Oil futures contract specifications, lowering its sulfur specifications to 15 parts per million (ppm) from 2,000 ppm and expand the listed months an additional three years beginning with its May 2013 contract. These contracts are listed by and subject to the rules of NYMEX.
"These revisions to our benchmark heating oil contract are reflective of customer feedback and our desire to help market participants make a smooth transition to new lower-sulfur diesel standards for heating oil ahead of changes in environmental regulations in the Northeastern U.S.," said Gary Morsches, managing director, Global Energy at CME Group. "Not only will these modifications be beneficial to our customers, they will enhance liquidity by establishing a forward market beyond the currently listed April 2013 contract."
Following the transition to lower sulfur specifications, the Heating Oil contract will serve as a dual-use price benchmark for both the heating oil and on-road diesel markets. It will also more closely match diesel specifications in international markets, including the European ultra-low sulfur diesel market.
Pending all relevant regulatory review periods, these amendments will be effective April 30.