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Nymex Lowers Gas Futures Margins, Announces Record Energy Trading Year

With natural gas futures prices plummeting over the past few weeks, the New York Mercantile Exchange Inc. (Nymex) last week announced margin decreases for its natural gas futures, Henry Hub swap futures, Henry Hub penultimate swap futures, Nymex miNY natural gas futures and Henry Hub swing swap futures contracts. The changes went into effect at the close of business last Wednesday.

Since the warm weather trend hit in mid-December, February natural gas has plummeted from a high of $15.780 on Dec. 13, 2005 to an intraday low of $8.460 on Jan. 19, marking a $7.320 swing in just over a month. Last Wednesday's $8.694 settle marked a five-month prompt month low for a close.

Nymex said the margins on the first two months of the natural gas futures contract decreased to $9,000 from $12,000 for clearing members, to $9,900 from $13,200 for members, and to $12,150 from $16,200 for customers. Margins for the third month decreased to $6,500 from $8,000 for clearing members, to $7,150 from $8,800 for members, and to $8,775 from $10,800 for customers. Margins for all other months remained unchanged.

The margin rates on the first two months of the Henry Hub swap and Henry Hub penultimate swap futures contracts decreased to $2,250 from $3,000 for clearing members, to $2,475 from $3,300 for members, and to $3,038 from $4,050 for customers. Margins for the third month decreased to $1,625 from $2,000 for clearing members, to $1,788 from $2,200 for members, and to $2,194 from $2,700 for customers. Margins on all other months remained unchanged.

Margins for the first two months of the Nymex miNY natural gas futures contract decreased to $2,250 from $3,000 for clearing members, to $2,475 from $3,300 for members, and to $3,038 from $4,050 for customers.

Margins for the first month of the Henry Hub swing swap futures contract decreased to $2,250 from $3,000 for clearing members, to $2,475 from $3,300 for members, and to $3,038 from $4,050 for customers.

Nymex also reported last week that it set a number of trading volume records in 2005. The exchange posted an annual volume record of 204,611,147 contracts in 2005, shattering the previous record of 163,122,155 contracts set in 2004. The annual total includes a record 166,608,252 exchange-wide futures contracts and a record 38,002,895 exchange-wide options contracts, which surpassed the 2004 records of 133,248,596 futures contracts and 29,873,559 options contracts.

During the year, total energy futures contracts traded reached 112.3 million topping the 2004 record of 96.99 million contracts changing hands.

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