Magazine article Modern Trader

Musical Trading Floors ... Race to a Global Oil Mart

Magazine article Modern Trader

Musical Trading Floors ... Race to a Global Oil Mart

Article excerpt

Round and round the trading pit goes, where it stops ... Is London, at least four to six months down the road, and probably much longer.

But until then, International Petroleum Exchange (IPE) traders looking to do their business open outcry had better get themselves a place in Dublin with a monthly lease--or stage a strike like they did last July.

That's because the IPE, which is owned by the Atlanta-based Intercontinental Exchange (ICE), plans to shutter its London Brent crude oil and gas oil futures and options pits on April 7, leaving the New York Mercantile Exchange's (Nymex) Dublin trading floor the only open-outcry oil and gas game anywhere near London town.

Nymex's Dublin floor, which opened October 2004, is only slated to remain open until Nymex gets regulatory approval to launch its coveted open-outcry London facility. The exchange, however, has not even applied to the U.K.'s Financial Services Authority (FSA) for an operating license. A Nymex spokesperson says the move to London will take four to six months after such approval is granted, and before the Dublin facility is shuttered, it will be expanded from its current 40-trader capacity to 100.

That is, unless IPE floor traders implement a blocking action. At press time, no such action had been announced, but the IPE has stated that in the event of action by traders they reserve the right to close the floor earlier than scheduled.

It is all part of a race to establish the predominant global energy market. Nymex, under the leadership of former CFTC chairman Jim Newsome, has been working to establish a network of exchanges from Singapore to Shanghai. …

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