Publications: Papers

The Likely Impact of the First Excellent Futures Contract for Internationally Traded Crude Oil (March 2021)


Traders, economists, and commodity exchange executives have struggled for more than a century to create a high-quality energy futures contract. In the process, they have encountered, for several reasons, far more significant problems with crude oil, natural gas, and electricity contracts than for other commodity futures.


Take crude oil, for example. The absence of a top-quality futures contract for delivering crude in international markets has denied consumers the economic benefits that come with perfect contracts, e.g., crude oil markets have remained uncompetitive, and producers have enjoyed higher prices than would otherwise prevail.


The ICE Murban futures contract (labeled the ICE Futures Abu Dhabi, or IFAD, contract) will probably resolve this issue.