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TheInternational Exchange, nowICE Futures (since 2005-04-7), based inLondon, was one of the world's largest energyfutures and options exchanges. Its flagship commodity,Brent Crude was a world benchmark for oil prices, but the exchange also handledfutures contracts andoptions onfuel oil,natural gas,electricity (baseload and peakload), coal contracts and, as of 22 April 2005,carbon emission allowances with theEuropean Climate Exchange (ECX).
The IPE was acquired by theIntercontinental Exchange in 2001. The IPE was anopen outcry exchange until 7 April 2005, when its name was changed toICE Futures and all trading was shifted onto anelectronic trading platform.[1]
Until the 1970s, the price of oil was relatively stable with production largely controlled by the biggest oil companies. During that decade two oil price shocks led to continued pricevolatility in the market; short-term physical markets evolved, and the need to hedge emerged.
A group of energy and futures companies founded the IPE in 1980, and the first contract, for gas oil futures, was launched the following year.[2] In June 1988, the IPE launchedBrent Crude futures.
Since its inception, oil futures and latterly options have been traded in pits on thetrading floor using the open outcry system. As business volumes have grown, the IPE has moved location several times to accommodate new pits and more traders.
The Exchange has experienced incremental growth, year-on-year for most of its history. Complexity, but also efficiency have increased as new trading instruments such asswaps, futures, and options have been developed.
Since 1997, the ICE Futures has expanded its offerings from Brent Crude and Gas Oil to include Natural Gas (1997), Electricity (2004), and ECX carbonfinancial instruments (2005). These expansions have allowed ICE Futures to offer a wider range of energy products. More advanced transactions are also now possible, due to cross- and multi-product transactions, which eliminate the need to use multiple markets or an adviser.
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