Energy Futures Exchanges and OTC Trading
Energy trading began after the end of the Official Selling Price (OSP) programs by the major oil companies and OPEC nations after the 1973 Oil Embargo and coincided with the development of a spot market for crude oil and petroleum products. In 1978, the changing structure of the physical spot market for oil brought about the development and launch of a successful oil futures contract for home heating oil on the 132-year-old NYMEX which was tied to physical delivery of the oil in New York Harbor. Successive oil futures contract and the development of an active and viable OTC market for forward oil trading in the 1980s brought significant structural changes to the global oil industry. Oil had become a commodity. In effect, price transparency accelerated both the physical and financial trading of crude oil and petroleum products on an international scale.
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