As traders on the New York Mercantile Exchange (Nymex) were looking forward to the Christmas holiday extended weekend, some within the energy industry were already looking at the exchange's slimmed-down 2007 holiday calendar and wondering when Ebenezer Scrooge showed up. Cutting back Christmas and Thanksgiving leave time "shows the need for greed," one New York-based broker said, adding that the move was also made to stay competitive with Nymex's chief rival Atlanta-based IntercontinentalExchange (ICE), which stays open through Thanksgiving.
In previous years when Christmas fell on a Thursday (2003) or a Tuesday (2001), Nymex would extend the holiday to create a five-day weekend. In 2003, Nymex deemed Friday, Dec. 26 a holiday and in 2001 the exchange was closed on Monday, Dec. 24.
In 2007 Christmas falls on a Tuesday, but the exchange plans to be open on Monday Dec. 24, according to the company's calendar released a few months ago www.nymex.com/holida_schedu.aspx#2007. The exchange's long-held Thanksgiving holiday schedule also received a trimming. After being closed on the Friday that follows Thanksgiving for a number of years, the exchange in 2007 will now be open on that day. Calls to Nymex for comment were unreturned as of press time.
Informed that the exchange was taking away the Friday after Thanksgiving, the New York-based broker pointed out that Nymex had tried this before and failed. "They did this once before a number of years ago," he said. "They kept the market open the Friday following Thanksgiving for two years. They ended up doing so little business and the market was so dead, they went back to having Friday off the next year. This is really a killer because it means I now have to come in on a silly Friday to sit around and do absolutely nothing. I guarantee they are doing this out of greed and because of competition with ICE. They don't want to be closed while the competition is open."
Commercial Brokerage Corp.'s Ed Kennedy, said "Nymex is going to do whatever they want to do. Anyone who was going to take those extra days off over Christmas and Thanksgiving are going to do it anyway, regardless of the Nymex holiday calendar."
As an example, Kennedy highlighted what is likely to happen at the end of this week. "Watch what happens Thursday. Right after the storage report hits in the morning, everyone is going to start leaving the floor. They won't return until Tuesday."
One New England broker noted that not many people are aware of the change in Nymex's holiday policy. He added that support for Nymex's scaled-back holiday schedule was hard to find. When asked if he'd heard any feedback about whether anyone was in favor of the new schedule, he replied, "No one I know -- or would want to know for that matter -- is [in favor of it]."
Rafferty Technical Research's Steve Blair said the move by Nymex was basically a case of "keeping up with the Joneses," which in this case would be ICE. "Now that the market is going electronic, the exchanges pretty much want these markets to be 24-hour markets with as few interruptions as possible," he said. "I also think this is an attempt to regain some of the market share Nymex would lose to ICE if it were to take an extra day off."
Nymex has also recently announced that its regular open outcry trading session of energy futures and options is being extended come February (see Daily GPI, Dec. 15). Opening times for crude oil futures and options, natural gas futures and options, heating oil futures and options, and gasoline futures and options markets would change to 9 a.m. from 10 a.m. EST beginning on Feb. 1. The close of the trading floor will remain 2:30 p.m.
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