Nymex Sticks to Traditional Oil Futures Settlement Time Amid Platts Pricing Shift

Strategic Insights -

The New York Mercantile Exchange (Nymex), a unit of CME Group Inc., has decided against changing its traditional 2:30 p.m. Eastern settlement time for oil futures in response to a shift in policy by major oil information service Platts. The shift, which involves referencing futures prices at 3:15 p.m. instead of 2:30 p.m., has been met with a response from Nymex, but the exchange has chosen to stick with its existing settlement time. Instead, Nymex will launch six "minute-marker" contracts in crude, RBOB gasoline, and heating oil futures, which will settle based on trading taking place in the minute before 3:15 p.m. ET.

Key Takeaways:

  • Nymex has decided not to change its traditional 2:30 p.m. Eastern settlement time for oil futures despite a shift in policy by Platts.
  • The shift by Platts involves referencing futures prices at 3:15 p.m. instead of 2:30 p.m.
  • Nymex has launched six "minute-marker" contracts in crude, RBOB gasoline, and heating oil futures.
  • The minute-marker contracts will settle based on trading taking place in the minute before 3:15 p.m. ET.
  • The decision was made by Nymex in response to issues arising from Platts's pricing changes.
  • Anu Ahluwalia, a spokeswoman for Nymex, stated that the exchange is not changing the settlement time for energies.
  • Dan Brusstar, CME director of energy research, explained that the minute-marker contracts are designed to address issues arising from Platts's pricing changes.

Statistics:

  • 2:30 p.m. is the traditional settlement time for oil futures on Nymex.
  • 3:15 p.m. is the time at which Platts now references futures prices.
  • 6 "minute-marker" contracts will be launched in crude, RBOB gasoline, and heating oil futures.
  • The minute-marker contracts will settle based on trading taking place in the minute before 3:15 p.m. ET.

Sources:

  • Dow Jones Commodities News via Comtex (New York, Jun 10, 2009)
  • Dow Jones Newswires (201-938-4377; greg.meyer@dowjones.com)
  • Dow Jones & Company, Inc. (c) 2009