One Exchange and Marex Spectron say aggregating their indices into one will provide more clarity in the Canadian cash market, greater liquidity and more accurate benchmark pricing for trading financial contracts.
At present the Canadian crude market is served by a number of brokers offering different indices, the two largest being Net Energy and Shorcan Energy.
Industry players estimate around 80 percent of trading in the benchmark heavy Canadian grade Western Canada Select (WCS) goes through Net Energy and Shorcan.
The Canadian Crude Index Alliance (CCIA) will cover the whole spectrum of crude grades from WCS to synthetic crude and condensate, said Perry Undseth, president of One Exchange.
Undseth said the firms “believe that CCIA will provide customers with better trading and hedging opportunities by increasing liquidity and attracting new market participants in both physical and financial products.”.
The CCIA will invite other brokers to join the new index, Undseth said. Neither Net Energy or Shorcan immediately responded to requests for comment.
(Reporting by Nia Williams; editing by Grant McCool)