PrintOverview
In 2008, the price of crude oil on the New York Mercantile Exchange (NYMEX) hit an all-time high of $147 per barrel. And, within (6) months, the price had fallen to about $35. Again, in 2014, oil was over $100/Bbl in June only to fall to below $50/Bbl by December. (Any more recent examples?)While many factors led to these "peaks and troughs, the nature of futures trading and the Exchange itself made this possible. The New York Mercantile Exchange has been around since the late 1800s here in the US, and it is still the most influential financial energy commodities exchange in the world. In this lesson, we will explore the history of the Exchange, how it functions, the participants, and the commodities traded.
Learning Outcomes
At the successful completion of this lesson, students should be able to:
- Understand the history and development of the Exchange
- List traded commoditites
- Identify the components of a standard NYMEX contract
- Differentiate between “pit” and electronic trading
- Recognize various exchange “floor” personnel and players
- Understand (list, explain, ??) the specific contract provisions for:
- Natural Gas
- Crude Oil
- Heating Oil
- Unleaded Gasoline
- Understand the importance of the “price discovery” function provided by the Exchange for energy commodities - do they need to do something with the price discovery
What is due for Lesson 3?
This lesson will take us one week to complete. The following items will be due Sunday at 11:59 p.m. Eastern Time.
- Lesson 3 NYMEX Prices Activity
- Lesson 3 Quizzes 1 & 2
- Fundamental Factors
Questions?
If you have any questions, please post them to our General Course Questions discussion forum (not e-mail), located under Modules in Canvas. The TA and I will check that discussion forum daily to respond. While you are there, feel free to post your own responses if you, too, are able to help out a classmate.