NEW YORK -- Heavy crude from Canadian oil sands projects will be traded next week on the New York Mercantile Exchange.

NYMEX will launch open-cry floor trading Monday in futures contracts for Canadian heavy crude oil (commodity code: WCC), a blended product of oil sands crude from northern Alberta. Electronic trading opens Sunday on ClearPort, a trading platform run by CME Group, which owns NYMEX as well as derivatives and mercantile exchanges in Chicago.

Each individual futures contract amounts to 1,000 barrels of oil, priced in American dollars. The first listed month will be September 2010. Contracts will be available for trading for 36 months out.

CME Group says the initial index price of any given monthly contract will be equal to the average existing prices for Western Canadian Select heavy crude. Western Canadian Select (commodity code: WCS) is a blend of mostly bitumen-derived crude mined from the Athabasca oil sands and some heavy conventional crude. Select is delivered by four major oil producers -- Suncor Energy Inc., Canadian Natural Resources Ltd., Cenovus Energy Inc. and Talisman Energy Inc. -- at Hardisty, Alberta, and carried south via a pipeline owned by Enbridge Inc.

The Canadian Daily Index price for WCS crude, the current benchmark for tracking over-the-counter trades in Canadian oil, is maintained by Calgary, Alberta-based Net Energy Inc., a trading host and industry news aggregator. CME and Net Energy signed an exclusive licensing deal back in March to bring the contract to ClearPort and the NYMEX trading floor.

Net Energy CEO Tim Gunn said the move to trading on NYMEX was demanded by customers.

"The Net Energy customer base will now have the ability to take advantage of the size and scope of the CME clearing house to help mitigate counterparty risk for trading the Canadian crude oil contract," Gunn said in a statement. "This contract is exactly what many of our customers have been asking for as it introduces flexibility in their risk management programs and added liquidity to the marketplace."

Previously, the only crude futures contracts based on foreign production listed in New York were in Brent crude from Europe's North Sea and the Russian Export Blend crude. Spot and futures trading in West Texas Intermediate, a product shipped to refiners at NYMEX's price settlement point at Cushing, Okla., is the benchmark for tracking oil prices in the United States and around the world.

The energy research firm IHS Cambridge Energy Research Associates announced in May that Canadian oil sands will become the top single source of U.S. crude imports this year. Tar sands production currently accounts for half of Canadian crude exports.

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