The New York Mercantile Exchange boosted the margin requirement on its oil futures for the first time since March 2009 and the IntercontinentalExchange Inc. raised its rates for the second day in a row as crude traded above $100 a barrel.
Margins for speculators on the Nymex will increase to $6,075 per contract from $5,063 after the close of trading tomorrow, according to a notice on the website of the CME Group, Nymex’s parent. For hedgers, the rate will rise to $4,500 from $3,750. The latest change on ICE will boost the Brent margin to $5,200 from $4,850. The cost has jumped 14 percent this week.
“If you have the margin raised, that takes capital out of your position,” said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston. “You have to reduce your position to balance your margin account.”
The last time Nymex changed its margin requirement was April 23, when it cut rates, according to Chris Grams, a CME spokesman.
“We regularly review market volatility and make margin adjustments as necessary,” Grams said in an interview.
ICE raised its margin requirement for trades beginning today in a statement Feb. 22. The additional increase announced today will go into effect for margin calls made tomorrow. The changes affect both ICE Futures Europe oil contracts and over-the-counter trades, according to a message on the company’s website. It also announced margin adjustments for gasoil.
Oil for April delivery fell 82 cents, or 0.8 percent, to settle at $97.28 a barrel on the Nymex. The contract touched $103.41, the highest intraday price since Sept. 29, 2008. Futures are up 22 percent from a year ago.
Brent oil for April settlement rose 11 cents to $111.36 a barrel on the ICE Futures Europe exchange, the highest close since Aug. 29, 2008. Futures touched $119.79 a barrel in intraday trading, the highest level since Aug. 22, 2008.
Brent futures set a record trading volume of 805,232 contracts yesterday on ICE.