The New York Mercantile Exchange (Nymex) will open its new London open-outcry trading floor on September 12th, switching trading activity from Dublin to the UK.
Nymex launched the Brent crude oil futures contract in Dublin last November, just as its London-based rival, the International Petroleum Exchange (IPE), closed its Brent trading ring during morning hours.
The IPE move, part of a shift towards electronic trading, proved unpopular with some London traders, many of whom prefer the open outcry trading method, which requires buyers and sellers gathered in a central location to cry out bids and offers to each other.
Still, some London traders said Nymex has missed its chance to take advantage of traders' dissatisfaction with the morning closure of the IPE ring, saying it has taken too long to set up the London site. However, one set of Dublin traders said that while activity may be slow to start, Nymex will benefit from the possibility of traders locking in contracts of Brent and US light crude on a single exchange.
The original decision to choose Dublin for the site stemmed from the speed with which Nymex could get regulatory approval. However, volumes were much lower than the 10,000 Nymex had targeted and the group said in February it would close the site. Dublin trading will end on September 9th.
(Additional reporting - Reuters)
