November 30, 2009 / 3:53 PM / 11 years ago

FACTBOX: NYMEX and ICE's long-standing rivalry

(Reuters) - The world’s biggest energy market-place the New York Mercantile Exchange (NYMEX) and IntercontinentalExchange, have long been fierce competitors.

NYMEX began crude oil futures trade in 1983 and became home to a light crude futures contract that has become the world’s most liquid oil futures contract, representing the world’s biggest energy consumer.

Brent crude futures began to be traded on London’s International Petroleum Exchange (IPE) in 1988.

The IPE was bought by Atlanta-based IntercontinentalExchange in 2001.

Although less liquid than the NYMEX U.S. crude contract, Brent is used more widely as a benchmark on physical oil markets, where it is used for pricing around two thirds of the world’s physical crude.

Brent futures volumes still lag those of U.S. crude traded on NYMEX, but they have risen strongly since the ICE became the first fully electronic energy exchange in 2005.

During a period of initial hostility to electronic trading, NYMEX, part of CME Group, launched a trading pit for open outcry Brent trade. The experiment was abandoned after it failed to wrest liquidity from more established ICE Brent futures.

NYMEX still has a Brent contract, just as the ICE has a U.S. crude contract, but Brent is far more liquid on the ICE and U.S. crude is much more heavily traded on NYMEX.

NYMEX also still has an open outcry pit in New York, but far more volume trades through its electronic platform Globex.

U.S. crude traded more than 13 million lots in October, a 13.2 percent rise from a year earlier.

NYMEX’s Brent oil futures contract accounted for 1,051 lots in October. The volume marked 96 percent fall year-on-year.

Apart from the main U.S. crude futures contract, NYMEX’s leading contracts are U.S. RBOB gasoline and heating oil.

RBOB traded 2.08 million lots in October, up by 43 percent from a year earlier, and heating oil 1.96 million lots, up by 20 percent, CME data showed.


The ICE has a WTI contract, which traded around 4.36 million lots in October, a fall from 4.52 million lots a year earlier.

By contrast, Brent crude volume on the ICE grew by 7.3 percent to 6.9 million lots in October from 6.43 million lots a year earlier.

Like Brent, gas oil is regarded by many as a widely useful marker, which can be used for benchmarking heating oil and diesel.

Gas oil trade totaled 3.36 million lots in October, up 17 percent from 2.87 million a year earlier.

Brent and U.S. crude’s future as the leading marker grades has been challenged by the launch of futures contracts on both NYMEX and ICE based on the Argus Sour Crude Index following a change in the way Saudi Arabia prices its crude.

NYMEX launched ASCI contracts earlier this month and will launch a physically deliverable U.S. Gulf sour crude contract as early as December 7 — the day ICE plans to launch its ASCI contracts.

Compiled by Barbara Lewis and Ikuko Kurahone

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