LONDON – The New York Mercantile Exchange (search), the world's biggest energy futures marketplace, announced plans Monday to open a futures energy exchange in London, home of its biggest rival, the International Petroleum Exchange (search).
Nymex President James Newsome said that Nymex intends to open the exchange, to be called Nymex Europe Ltd. "as soon as possible."
The new exchange will allow Nymex to shift its Brent crude oil futures contract from Dublin to London for direct competition with the International Petroleum Exchange.
The IPE, owned by Atlanta-based IntercontinentalExchange Inc. (search) , is the world's second-largest energy market.
Newsome said the new Nymex market will be committed to open outcry trading, a method of trading that IPE is moving away from.
"Our primary purpose today is not only to announce our intent to come to London, but to show our deep commitment ... also to the open outcry method of trading that Nymex certainly is well known for," Newsome told reporters in London.
He said there was no date set for the opening of the new exchange, saying only that Nymex intends to do it as soon as possible.
Newsome said that Nymex has not yet filed an application with the U.K. Financial Services Authority for regulatory approval of the London exchange, but is planning to do so in the next few weeks.
In addition to offering a Brent crude futures contract in London, Nymex also is considering a gas oil futures contract, Newsome said.
He declined to disclose a cost estimate for the exchange.
Nymex's Dublin exchange opened on Nov. 1, in a move timed to take advantage of the IPE's move to close its Brent crude pits during morning hours.
The IPE intends to move eventually to exclusively electronic trading, a move designed to boost efficiency. That has angered some traders who fear they will be put out of business. The IPE responded by cutting its fees.