The New York Mercantile Exchange (Nymex) will launch its Brent crude trading pit in London next month and will close its Dublin operation.
Nymex set up its open outcry pit in Dublin in November 2004 to try to grab volume from the IPE's Brent contract. It chose Dublin initially because regulatory approval could be obtained very quickly from authorities here.
But the Nymex Brent contract has failed to attract much liquidity, despite some initial success.
Total volumes have been between 3,000 and 10,000 lots for the last couple of months, traders said.
"I think they have left their run too late," said one trader. "Electronic trading on the IPE is well established now."
But Liam Fenton of FFD Trading said: "It's going to be positive for us, it's the biggest exchange in the world. . . . Traders will have the benefit of cross-margin contracts. . . . There is still a battle to be fought."
The InterContinental Exchange took control of the IPE in 2001, and one of the conditions of its takeover was a complete switch to electronic trade.