Nymex agrees with BSE new futures trading floor for Europe

With crude oil production in the Urals increasing to around 4 million barrels per day, more than North Sea Brent’s hundreds of thousands of barrels per day, the time seems to have come to establish a central European oil futures market.

Accordingly, The New York Mercantile Exchange (Nymex) has recently agreed with the Budapest Stock Exchange and the Budapest Commodity Exchange to develop the first crude oil futures contract to be traded in Hungary.

This, despite the fact that it has been difficult to reach contract specifications for Urals crude because it trades at a discount in relation to Brent and other crudes due to a higher sulphur content.

Another drawback to establishing such a market is the small numbers of both energy companies and investors in the region.

These problems have held up previous attempts, first announced in 1996, to establish such a central European market.

Nymex, however, is ready now to set up the Budapest market as well as carrying through with plans to open a trading floor in London later in the year as well as to begin trading in Tokyo and Dubai.