TORONTO (miningweekly.com) – Calgary-based Auspice Capital Advisors has launched the first-ever live Canadian Crude Oil Index (CCI), enabling investors and market participants to actively monitor the price of Canadian crude oil in real-time.

Tracked and reported on the NYSE website, the CCI is directly available to traders through their Bloomberg terminals under the ticker symbol ‘CDNCRUDE’.

Auspice founder and chief information officer Tim Pickering told Mining Weekly Online that the CCI served as the only benchmark for oil produced in Canada, enabling investors to track the price, risk and volatility of the Canadian commodity.

“Canada has the third-largest oil reserve in the world and is the leading exporter of crude oil to the US. As such, it is important for investors to be able to actively track the commodity and capitalise on its performance. Through the launch of the live version of the CCI, the transparent and liquid benchmark will provide greater access to investment positions within the commodity and [will] ultimately enhance overall market participation,” he stated.

MORE PARTICIPANTS
Pickering added that, with the introduction of real-time prices for Canadian crude, it opened the market up to more participants, which could in the long run provide some upside for the embattled yet critically important commodity.

“If nobody can trade Canadian crude, other than physical wholesale participants, the market will continue to struggle to reach its full price potential. It is important for other players such as speculators, hedgers, and retail and institutional investors to have increased access to the commodity,” Pickering said.

Having increased transparency in a traditionally murky market could play its part in improving the Canadian crude market, aside from logistics issues involved in physical trading.

Auspice’s CCI is priced in US dollars, employing a rolling three-month exposure to improve liquidity, lower transaction costs and reduce the effects of contango. Contango is a situation where the futures price – or forward price – of a commodity is higher than the expected spot price.

Each trading day, the index value is determined by its third-party calculation and publication agent, the NYSE Global Index Group, based on daily returns of prices published by ICE Futures Europe.

The CCI enables investors to identify opportunities and speculate outright on the price of Canadian crude oil, Pickering advises.

Auspice’s CCI exchange traded fund already capitalised on the current market’s performance by replicating the returns that an investor would expect to receive from holding and rolling the contracts encapsulated within the benchmark index. Outside of the wholesale marketplace, it is the only way to invest in the commodity, Auspice noted.