Fastmarkets, Intercontinental Exchange launch UCO futures contract to meet rising biofuel demand

Fastmarkets and Intercontinental Exchange (ICE) announced Dec. 9 the launch of the ICE used cooking oil (UCO) Gulf (Fastmarkets) futures contract to meet growing demand and tackle complexity in the biofuel feedstock market.

The launch provides market participants with a new risk-management solution in the renewable energy sector.

Fastmarkets said it is an ideal choice for those looking to gain exposure to UCO price movements without the need for physical delivery.

Fastmarkets’ U.S. Gulf-based UCO assessment reflects the primary market region for UCO trade, capturing the broadest data pool necessary for accurate market pricing, the company stated.

This, according to Fastmarkets, ensures convergence between the futures price and the spot price at contract expiry, further bolstering confidence in market operations.

“With the increased volumes and diversity of stakeholders in the UCO market, now is the perfect time to introduce a futures contract that can aid in effective risk management,” said Przemek Koralewski, Fastmarkets’ global head of market development.

“This contract will provide market participants with a sophisticated tool to manage their price exposure, ensuring stability and supporting long-term strategic planning,” Koralewski added.

The launch of the ICE UCO futures contract is designed to support participants across the biofuel supply chain, including feedstock suppliers, refiners, traders, financial institutions and biodiesel producers.

“Liquidity in ICE’s biofuel complex has been growing rapidly over the last few years,” said Jeff Barbuto, global head of oil markets at ICE.

“We’re excited to work with Fastmarkets to add to the momentum and further develop the UCO market,” he said.

Ryan Standard, Fastmarkets’ regional managing editor, added, “The ICE UCO futures contract represents a significant advancement in the biofuel-feedstock market. By offering a reliable benchmark tied to our comprehensive price assessments, ICE and Fastmarkets are facilitating transparency and price discovery in the industry.”

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