Nymex to expand electronic energy trading on weekend

08 June 2006 22:29  [Source: ICIS news]

HOUSTON (ICIS news)--The New York Mercantile Exchange (Nymex) said on Thursday that the expansion of electronic trading of its energy futures beginning this weekend will help it compete against the Intercontinental Exchange (ICE).

Beginning 11 June (for the 12 June session), the Chicago Mercantile Exchange (CME) will provide access to electronic trading of Nymex products nearly 24 hours/day. The contracts will be traded side by side with Nymex’s customary open-outcry futures.

Initially, five contracts will be offered on the CME electronic Globex trading system. Crude, heating oil, gasoline and natural gas will settle on the penultimate trading day of the spot month. A second natural gas contract will terminate on the last day of trading of the spot month.

During the third quarter, all products trading on the Nymex Access after-hours electronic trading platform will transition to the CME Globex. Contracts traded on CME Globex will be processed thought the Nymex clearinghouse.

Despite competition from ICE, Newsome said Nymex continues to set record trading volumes. ICE said this week that its West Texas Intermediate oil futures contract, which began trading in February, grew to nearly 2.5m contracts in May.

Newsome said the expanded electronic trading through would not necessarily reduce oil and gas prices volatility, a major concern of US chemical companies. He said no one likes volatility in energy prices but the trading of futures contracts isn’t to blame.

“Uncertainty has a cost and were seeing that [cost reflected] in the marketplace today,” he said.

By: Patrick Crow
+1 713 525 2653

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