History
Until the 1970s, the price of oil was relatively stable with production largely controlled by the biggest oil companies. The 1970s transformed the industry forever. Two oil price shocks meant that price volatility became a fundamental feature of the market, short-term physical markets rapidly evolved, and the need to hedge emerged.
A group of energy and futures companies founded the IPE in 1980, and the first contract, for gas oil futures, was launched the following year. In June 1988, the IPE successfully launched Brent Crude futures. Volumes rapidly took off, and the Exchange has experienced incremental growth, year-on-year for almost its entire history. New trading instruments such as swaps, futures, and options have grown up. The modern business, though complex, is efficient, flexible, and fast moving.
Since its inception, oil futures and latterly options have been traded in pits on the market floor using the open outcry system. As business volumes have grown, the IPE has moved location several times to accommodate new pits and more traders.
Read more about this topic: International Petroleum Exchange
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