London's International Petroleum Exchange (IPE) plans to move to larger premises in London, but will continue with traditional "open outcry" trading in preference to on-screen dealing.
Following a strategic review, IPE said it will move from its site beside Tower Bridge to the Royal Exchange building at the heart of London's financial district. The lease on IPE's current building expires in mid-1998.
IPE Chief Executive Lynton Jones said the Royal Exchange would provide a better trading environment.
IPE members had considered changing over to electronic trading of crude oil contracts, as are used in trading of U.K. natural gas contracts. However, members preferred to retain face-to-face dealing.
Open-outcry trading requires buyers and sellers to trade within earshot of competitors, so that everyone has a fair chance to bid on a contract (OGJ, June 19, 1995, p. 31).
IPE said that optimum efficiency for running the exchange would be obtained through open-outcry trading for an 11 hr/day, backed up by electronic trading when the trading floor is closed.
IPE has links with the New York and Singapore exchanges, so London traders can operate around the clock. The exchange saw trading of an average 55,000 contracts/day in January, equivalent to 55 million bbl of oil.
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