Oil
After the potato ban, NYMEX's existence was in doubt. Most of the trading volume had been in potatoes. Without a good commodity, the traders had trouble making money. Eventually the new chairman, Michel Marks – the son of commodities icon Francis Q. Marks – along with economist Arnold Safer, figured out that NYMEX could revamp an old heating oil futures contract. When the government deregulated heating oil, the contract had a chance of becoming a good object of trade on the floor. A new futures contract was carefully drawn up and trading began on a tiny scale in 1978. Some of the first users of NYMEX heating oil deliveries were small scale suppliers of people in the Northern United States.
NYMEX's business threatened some entrenched interests like big oil and government groups like OPEC that had traditionally controlled oil prices. NYMEX provided an "open market" and thus transparent pricing for heating oil, and, eventually, crude oil, gasoline, and natural gas. NYMEX's oil futures contracts were standardized for the delivery of West Texas Intermediate light, sweet crude oil to Cushing, Oklahoma.
Read more about this topic: New York Mercantile Exchange
Famous quotes containing the word oil:
“To make a good salad is to be a brilliant diplomatist—the problem is entirely the same in both cases. To know exactly how much oil one must put with one’s vinegar.”
—Oscar Wilde (1854–1900)
“I bade, because the wick and oil are spent
And frozen are the channels of the blood....”
—William Butler Yeats (1865–1939)
“It is wise to apply the oil of refined politeness to the mechanism of friendship.”
—Colette [Sidonie Gabrielle Colette] (1873–1954)