CFTC Energy & Environmental Markets Advisory Committee Meeting

April 17, 2019

Ben Jackson President

INTERCONTINENTAL EXCHANGE

builds, operates and transforms global markets through information, technology and expertise

CFTC Energy & Environmental Markets Advisory Committee Meeting 2

Markets Futures, options and OTC markets across the EU, US and Asia

Clearing A global network of clearing houses powering market transparency and security

Data Unrivalled range of data products

support critical decision making

Intercontinental Exchange (NYSE: ICE)

INTERCONTINENTAL EXCHANGE CFTC Energy & Environmental Markets Advisory Committee Meeting 3

Macro energy trends

Energy transition • Decarbonization

• Desulfurization

Changing global energy trade flows • A global gas market

• Shale revolution

An overview

INTERCONTINENTAL EXCHANGE

Energy trends

CFTC Energy & Environmental Markets Advisory Committee Meeting 4

Decarbonization

Desulfurization

• Reducing the carbon footprint of the energy sector has increased adoption of renewables in electricity generation and transportation fuels.

• ICE offers a growing suite of suite of North American & European carbon allowance and renewable energy futures.

• Intermittency in renewable electricity does require alternative fuel sources to provide security in supply, natural gas is the cleanest and most versatile fossil fuel to partner.

• Market based mechanisms in environmental markets are an important catalyst in supporting the energy transition.

• In 2015 we transitioned ICE gasoil futures from 1,000 ppm to a 10 ppm sulfur specification – now the benchmark in middle distillates.

• IMO 2020 0.5% sulfur cap, is the next catalyst in this shift and will drive global LS marine gasoil demand from 700kb to 3.4m a day starting Jan 1, 2020.

• ICE offers a wide range of low sulfur gasoil futures and a global complex of derivatives based on local assessments which clear on ICE.

• ICE has listed a suite of IMO 0.5% sulfur instruments to

supplement our fuel oil derivatives complex as hedging needs change and customers try to manage this price risk.

INTERCONTINENTAL EXCHANGE

Energy trends

CFTC Energy & Environmental Markets Advisory Committee Meeting 5

Global gas market

Shale revolution

• Managing global risk has never been more important, natural gas is transforming as pricing is increasingly global and commercial participants seek to manage risk as close to the source of consumption or production.

• Underpinned by the liberalization of LNG, North America, Europe and Asia are becoming interconnected.

• Our global infrastructure is built for commercial end users

who choose to hedge their exposure to risk using regional and local locations.

• Asia and Europe are driving demand for a high quality U.S. crude that isn’t blended.

• Working with physical participants, we have developed

mechanisms that meet the quality, delivery and storage infrastructure needed.

• Permian WTI futures provides delivery in Houston, as crude prices shift from Cushing to the waterborne U.S. Gulf Coast.

Global oil benchmarks

INTERCONTINENTAL EXCHANGE

About Intercontinental Exchange

Intercontinental Exchange (NYSE:ICE) is a Fortune 500 company that operates a leading network of global futures, equity and equity options exchanges, as well as global clearing and data services across financial and commodity markets. The New York Stock Exchange is the world leader in capital raising, listings and equities trading.

Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located at http://www.intercontinentalexchange.com/terms-of-use.

Key Information Documents for certain products covered by the EU Packaged Retail and Insurance-based Investment Products Regulation can be accessed on the relevant exchange website under the heading “Key Information Documents (KIDS)”.

© 2018 Intercontinental Exchange, Inc. 7

Global crude benchmarks

CFTC Energy & Environmental Markets Advisory Committee Meeting

INTERCONTINENTAL EXCHANGE

Global crude

8

Open interest climbs as participants increase their hedging

CFTC Energy & Environmental Markets Advisory Committee Meeting

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2011 2012 2013 2014 2015 2016 2017 2018 2019

Lots

in T

hous

ands

ICE Brent Futures OI ICE WTI Futures OI ICE Dubai Related Contracts OI

0

500

1000

1500

2000

2500

Lots

Permian WTI

Brent, WTI and Dubai

Global natural gas complex

INTERCONTINENTAL EXCHANGE 10 CFTC Energy & Environmental Markets Advisory Committee Meeting

Global gas benchmarks

INTERCONTINENTAL EXCHANGE

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

12/1

/201

61/

1/20

172/

1/20

173/

1/20

174/

1/20

175/

1/20

176/

1/20

177/

1/20

178/

1/20

179/

1/20

1710

/1/2

017

11/1

/201

712

/1/2

017

1/1/

2018

2/1/

2018

3/1/

2018

4/1/

2018

5/1/

2018

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2018

7/1/

2018

8/1/

2018

9/1/

2018

10/1

/201

811

/1/2

018

12/1

/201

81/

1/20

192/

1/20

193/

1/20

19

JKM LNG (Platts)

Lots

Managing global gas risk

11

Open interest continues to grow as participants look for hedging opportunities

CFTC Energy & Environmental Markets Advisory Committee Meeting

230% growth in 2018

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

1/30

/201

53/

31/2

015

5/29

/201

57/

31/2

015

9/30

/201

511

/30/

2015

1/29

/201

63/

31/2

016

5/31

/201

67/

29/2

016

9/30

/201

611

/30/

2016

1/31

/201

73/

31/2

017

5/31

/201

77/

31/2

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9/29

/201

711

/30/

2017

1/31

/201

83/

29/2

018

5/31

/201

87/

31/2

018

9/28

/201

811

/30/

2018

1/31

/201

93/

29/2

019

Lots

European and US markets

EU Gas UK Gas US Basis US - Henry Hub

The power markets

INTERCONTINENTAL EXCHANGE 13 CFTC Energy & Environmental Markets Advisory Committee Meeting

Global power benchmarks

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Summary

14

• We’re witnessing increased competition between fuels amid the general shift to cleaner energy sources.

• Demand for U.S. crude and a liberalizing global gas market is seeing demand and supply dynamics become globalized.

• The broadest range of energy products is needed to help build and support the energy transition.

The energy transition

CFTC Energy & Environmental Markets Advisory Committee Meeting