What is the international Petroleum Exchange’
The international Petroleum Exchange, or IPE, was the London stock exchange for futures and options on several energy products. It was a subsidiary of the Intercontinental exchange known as ice, as ice is purchased in 2001, and is now known as ice futures.
International penetration ‘Oil Bourse’
The international Petroleum Exchange was founded in 1980, the group of energy and futures traders. The oil industry suffered an unprecedented instability in the 1970-ies, which arose from political and military conflicts in the middle East. Disruptions in world oil markets sent U.S. prices for gasoline grow, and its effects propagate to other parts of the world economy.
Futures contracts for the basic supply of oil allowed producers and consumers to hedge their positions and protect themselves from volatility in the future. A futures contract is a legal agreement between two parties to exchange an agreed asset at an agreed price on a specified date in the future. Future seller of the property has a short contract, and the future customer is considered long. Futures contracts are quoted in U.S. dollars and cents and not in lots of 1,000 barrels. The consumer of unrefined crude oil who is worried about the future jump in oil prices may buy a contract to buy oil at a lower price. Any such agreement must include a counterparty whose short position exposes them to significant risk if they need to go to the market to buy oil to put in a long holder of the contract.
In addition to producers and consumers of oil in the active futures markets to hedge, speculators joined the market in search of profits from price movements in oil. Instead of trying to protect themselves from the uncertainty of future prices, these traders seek to capitalize on their forecasts regarding the dynamics of prices. Although these individual transactions to the impact on underlying commodity prices, a large number of speculative transactions may lead to price fluctuations. Many researchers believe that oil speculation has contributed to sharp rise in prices for oil and gas in 2006.
IPE became known as ice futures after purchase on the Intercontinental exchange in 2001. It has expanded its portfolio with futures include a variety of energy sources, including natural gas and electricity. In 2005, the exchange moved from a system of open outcry where the trader floor to fulfill orders with hand signals, to the electronic trading system. The main competitors are the new York Mercantile exchange, or NYMEX and the Chicago Mercantile exchange.