NYMEX trading platform goes offline for an hour during trading time
San Francisco, CA -- (SBWIRE) -- 09/10/2012 -- The natural gas market of the New York Mercantile Exchange (also known as NYMEX) was down for almost an hour on Friday due to a technological glitch. This glitch was just the latest electronic failure of many that have taken down markets recently.
Trading on NYMEX’s Globex platform went down at 10:04 am EDT (7:04 am PDT) and didn’t resume until 11:00 am EDT according to Damon Leavell who is a spokesperson for NYMEX’s parent company (CME Group Inc). Leavell stated that the glitch didn’t cause any previously executed trades to be cancelled but that orders that had been placed but not actually executed needed to be re-entered.
This latest disruption is the most recent occurrence of technical problems shutting down a market. The last time that the natural gas market was affected by a glitch of this nature was in January 2011. During that outage, trading was halted for approximately half an hour, and all orders ended up being cancelled.
In February of this year, a much larger disruption of CME’s oil futures market occurred. This was more of a problem than todays’ disruption of the natural gas market because of two things. First, the market in oil futures is much larger than the market in natural gas, and secondly the disruption occurred at the end of the trading day. The final price of any commodity traded in any market is calculated at the end of the trading day, and this glitch led to some confusion over the day settlement price of oil futures.
Natural gas and oil futures aren’t the only markets that have experienced technical glitches. A few weeks ago, Thomson Reuters Corp TRI.T -0.78% electronic trading platform also experienced an outage. Even though this platform is one of the two largest systems used by currency traders all over the world, traders noted little impact arising from the outage.
Natural gas trading resumed around 11:00 am following a 15 minute long “pre-open” session during which traders re-entered orders that had been cancelled by the system due to the glitch. The technical problems were corrected, although there was no further information about the causes of those problems according to Leavell.
The malfunction appeared to have had little impact on natural gas prices; Leavell said that trading on the floor remained at normal levels. Traders stated that although they could trade, the volume just wasn’t there and was thinner than normal.
According to one trader on the floor not many people had called in trades even after the glitch was corrected.
Meanwhile, natural gas prices decreased to their lowest price in more than a week. The main reasons for the decrease include a glut of natural gas on the market as well as falling temperatures. Natural gas deliveries slated for October fell 9.4 cents (a 3.4% decrease) to $2.682 per million BTUS.
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