Bloomberg News

Nymex Oil Volume Reaches Six-Month Low as CME Limits MF Global

November 01, 2011

Nov. 1 (Bloomberg) -- Oil futures volume reached the lowest level in six months yesterday on the New York Mercantile Exchange as CME Group Inc., owner of the exchange, limited trading of MF Global Holdings Ltd.

Futures volume fell to 381,435 contracts, the lowest level since April 29. The number of contracts traded was 45 percent below the three-month daily average.

CME said yesterday that it’s limiting all trading for customers of MF Global to liquidation only and it will no longer recognize the firm or its divisions as a guarantor for purposes of floor trading privileges.

The low volume “absolutely was related to MF Global,” said Fred Rigolini, vice president of Paramount Options Inc. in New York. “MF Global has a huge percentage of trading accounts, from hedgers to funds to traders and those accounts were all frozen. Many traders were doing paperwork all day to transfer to other clearing houses and it had a big impact on volume.”

U.S. regulators are investigating whether hundreds of millions of dollars are missing from client accounts at MF Global, which filed for bankruptcy protection yesterday, according to two people with knowledge of the matter.

Crude oil for December delivery declined $1, or 1.1 percent, to settle $92.19 a barrel on the Nymex. Electronic trading volume was 563,928 contracts at 2:37 p.m. in New York.

-- Editors: Margot Habiby, Richard Stubbe

To contact the reporter on this story: Moming Zhou in New York at Mzhou29@bloomberg.net; Barbara J Powell in Dallas at bpowell4@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net


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