Building a world of
resilient communities.

MAIN LIST

 

Nymex launches Dublin oil trading

US energy exchange Nymex has set up a new oil trading floor in Dublin, Ireland, in a move it hopes will lure disenchanted dealers from London.
The move is part of an attempt to gain market share in trading Brent crude, the North Sea benchmark oil.

Nymex's new operation is based on the open outcry system, where deals are done face to face on the trading floor.

London's International Petroleum Exchange (IPE), by contrast, is moving towards all-electronic dealing.

The IPE's decision has proved unpopular with some traders.

Close eye

They complain that the electronic system results in a less transparent and less liquid market.

"I plan to bring my family over if it works," said Bart Pepper, a trader in Dublin on Monday. "The whole industry is just waiting to see what's going to happen this week."

There were about 40 traders on the floor at the opening bell in Dublin, according to Reuters.

Nymex said that more than 100 traders and clerks from London and New York have also registered to trade over the phone.

"Our international oil industry customers and the London oil trading community have been adamant about their desire to maintain open outcry energy trading with the liquidity and transparency uniquely provided by this forum," Nymex said.

To make the move from London more attractive, Nymex has been offering traders incentives.

For the first three months it will reimburse weekly living expenses of up to $1,000 (£545), as well as waiving transaction fees.

Tall order?

Some observers believe Nymex may struggle to take business from the long-established IPE and that it will move to London, the main market for the benchmark Brent crude contracts, if it can secure regulatory approval.

Nymex also introduced a new Brent crude futures contract on Monday in Dublin.

Both Nymex and the IPE trade in futures contracts for delivery in the following month.

In this type of transaction, the buyer agrees to take delivery and the seller agrees to provide a fixed amount of oil at a pre-arranged price at a specified location.

The IPE has pushed back the start of open pit trade to 2pm, with its supporters saying extended electronic trading hours has efficiency benefits.

Nymex begins at 10am in Dublin.

What do you think? Leave a comment below.

Sign up for regular Resilience bulletins direct to your email.

Take action!  

Find out more about Community Resilience. See our COMMUNITIES page
Start your own projects. See our RESOURCES page.
Help build resilience. DONATE NOW.

 

This is a community site and the discussion is moderated. The rules in brief: no personal abuse and no climate denial. Complete Guidelines.

Tags:  

U.S. tight oil production decline

U.S. oil production has begun to drop in response to low oil prices, but not …

Europe Oil Consumption Peaked in 2005

Consumption peaked 7 years after the production peak and is falling now in …

Peak Oil Review - Aug 31

 A weekly roundup, including: -Oil and the global economy -The Middle …

Peak Oil Notes - Aug 27

A midweek update. Oil prices fell sharply on Monday in response to another …

Deflationary Collapse Ahead?

Both the stock market and oil prices have been plunging. Is this “just …

My Chicken of an EV

A little over two years ago, my wife and I entered a new phase of life in …

In Clash of Greens, a Case for Large-Scale Solar Projects

Weaning the U.S. economy off fossil fuels will involve the wide deployment …